Banking sector stabilizes, leading to higher European stock futures
European stock markets are set to open higher on Tuesday as the region’s banking sector stabilizes. The DAX futures contract in Germany traded 0.3% higher, CAC 40 futures in France climbed 0.1% and the FTSE 100 futures contract in the U.K. rose 0.3% at 02:00 ET (06:00 GMT). After the recent turmoil surrounding the global banking sector, European banking shares rose on Monday, and officials at the European Central Bank (ECB) have reassured investors that the region is much better prepared than it was for the 2008 financial crisis. ECB Governing Council member Gediminas Simkus emphasized that banks in the euro system have high capital buffers, high liquidity and growing profitability from rising interest rates.
The ECB raised interest rates by 50 basis points earlier this month, which is a sign of confidence in the region’s banks, while officials continue their ongoing battle against soaring prices. Inflation data is due on Friday, which is set to show annual CPI gains slowed steeply in February. However, underlying inflation is likely to have pushed higher, underlining the need for the ECB to remain vigilant. French and Italian business confidence data for March is also set for release, following data from the Ifo institute released on Monday, which showed German business morale unexpectedly rose in March despite the recent banking turmoil. ECB President Christine Lagarde is also scheduled to give a speech at the opening ceremony of BIS Innovation Hub Eurosystem Centre in Frankfurt later in the session.
Oil prices have stalled after a recent rally, and U.S. crude futures traded 0.1% lower at $72.73 a barrel at 02:00 ET, while the Brent contract dropped 0.5% to $77.36. The American Petroleum Institute is set to publish its inventory data later in the session, which could provide information about the supply-demand outlook in the world’s largest consumer. The crude market has bounced from the 15-month lows seen earlier this month as markets feared that slowing economic growth will dent crude demand this year.
In addition, gold futures rose 0.3% to $1,977.70/oz, while EUR/USD traded 0.1% higher at 1.0811.