On Friday, European stock markets were likely to open a little bit higher, thanks to mostly good quarterly corporate earnings. However, the upcoming U.S. payroll data is likely to cause some caution.
At 2:00 AM ET (0600 GMT), the DAX futures contract in Germany went up 0.2%, the CAC 40 futures contract in France went up 0.1%, and the FTSE 100 futures contract in the UK went up 0.1%.
This week, European stocks went up because corporate earnings were mostly good, which made people less worried about the region’s economy slowing down later this year.
The Bank of England warned on Thursday that the economy would go into a long-lasting recession starting in the fourth quarter of this year. It did this by raising interest rates by 50 basis points to stop inflation from reaching levels not seen in 40 years.
The Reserve Bank of India kept up the trend early Friday by raising rates for the third time in as many months. However, the main focus will be on the closely watched U.S. employment report for July later in the session, as investors look for clues about how the Federal Reserve will assess the strength of the world’s largest economy.
People think that non-farm payrolls grew by 250,000 jobs last month, which is less than the 372,000 jobs that were added in June. That would be the 19th month in a row that payrolls went up, but it would be the smallest rise in that time.
The Fed might not feel as much pressure to raise interest rates by 75 basis points at its next meeting in September. This is because job growth has slowed down.
Investors will also keep an eye on the earnings season for the second quarter, when a number of big European companies will report.
The unstable markets hurt Allianz’s (ETR:ALVG) second-quarter net profit by a big 23 percent, but the company still stuck to its goal for the whole year.
Deutsche Post’s (ETR:DPWGn) revenue and earnings grew by double digits, and the company confirmed its outlook for 2022, as its freight and express business continued to do well after a strong start to the year.
Lufthansa (ETR:LHAG) will also be in the spotlight because the German airline and labour union Verdi reached a deal on a wage deal for ground crew. This will help stop more strikes after the chaos of last month.
Oil prices went up a little bit on Friday, but they are on track to drop a lot this week after falling to a six-month low because of worries that a slowdown in the world economy will hurt demand a lot.
Now that the Bank of England has warned of a recession, the oil market has lost all of the gains that were caused by Russia’s invasion of Ukraine.
Still, there isn’t enough oil to go around. In September, the Organization of Petroleum Exporting Countries (OPEC) and its partners, known as OPEC+, increased production by just 100,000 barrels per day, which is about 0.1% of the world’s oil demand.
By 2:00 AM ET, U.S. crude futures had gone up 0.6% to $89.08 per barrel and were on track to lose almost 10% for the week. The Brent contract went up 0.4% to $94.50 and was on track to lose 14% for the week.
Gold futures rose 0.1 percent to $1,808.05/oz, while the EUR/USD fell 0.2 percent to 1.0228.
