European Stock Futures Decline on Concerns Over Chinese Inflation Data and Growth
European stock markets are expected to open lower on Monday as weak Chinese inflation data raises concerns about the health of the world’s second-largest economy.
At 02:00 ET (06:00 GMT), the futures contracts for Germany’s DAX, France’s CAC 40, and the U.K.’s FTSE 100 were all trading lower.
The latest data from China shows a 0.2% month-on-month decline in consumer prices in June, resulting in a flat annual figure, the slowest since 2021. Producer prices also fell 5.4% year-on-year in June, the sharpest decline in seven-and-a-half years.
These figures indicate the need for further monetary and fiscal policy easing by Chinese authorities. However, they also highlight the challenge Beijing faces in avoiding a deflationary spiral, which could significantly impact European exporters who rely on the Chinese market.
This week, market participants will closely watch inflation data from both Europe and the United States. The U.S. consumer price index for June, expected to show a 3.1% annual increase, will be of particular interest, as it could influence the Federal Reserve’s decision on interest rate hikes.
Kering, the owner of Gucci, is in focus after reports that it acquired French fragrance label Creed for €3.5 billion in June. The acquisition aligns with Kering’s strategy to establish an in-house cosmetics business.
Oil prices declined on Monday due to concerns over Chinese demand. The U.S. crude futures traded 0.8% lower, while the Brent contract dropped 0.8%. The recent announcement by Saudi Arabia and Russia to deepen supply cuts in August had supported oil prices last week.
Gold futures also fell, and the euro traded lower against the U.S. dollar, reflecting the cautious sentiment in the market.