Stock Market

European Stock Futures Rise as Attention Shifts to German Retail Sales and China Manufacturing

European Stock Markets Poised for Higher Opening as U.S. Debt Ceiling Bill Progress Boosts Sentiment; Chinese Manufacturing Shows Signs of Recovery

As the trading day begins, European stock markets are anticipated to open on a positive note, fueled by advancements in the U.S. debt ceiling bill and encouraging indications from the Chinese manufacturing sector.

At 02:00 ET (06:00 GMT), the DAX futures contract in Germany exhibited a 0.6% increase, while CAC 40 futures in France climbed by 0.5%, and the FTSE 100 futures contract in the U.K. rose by 0.3%.

Earlier today, data was released revealing that Chinese manufacturing activity surpassed expectations in May. The Caixin Manufacturing Purchasing Managers’ index for May stood at 50.9, exceeding the projected 50.3 and the previous month’s 49.5.

This private survey contrasts with the weaker official government data released earlier this week, offering hope for a recovery in this vital regional growth engine. China also serves as a significant export market for numerous prominent European companies.

Shifting our focus back to Europe, German retail sales experienced a 0.8% growth in April compared to the previous month, indicating an improvement from the 2.4% decline recorded earlier. However, this still translates to an annual drop of 4.3%.

Later in the session, manufacturing PMI data for several European countries will be unveiled. It is expected that the data will reflect a sector grappling with escalated prices and disrupted supply lines.

Nonetheless, the primary focus for today revolves around the May inflation figure for the Eurozone. Recent figures from various individual countries indicate a gradual easing of inflationary pressures, implying a potential downside to the anticipated 7.0% annual figure for May.

Global sentiment has received a notable boost following the U.S. House of Representatives’ approval of a bill to suspend the debt ceiling late Wednesday. This development has instilled optimism that the world’s largest economy can avert a default, which would have had dire economic consequences. The bill now awaits consideration in the Senate.

In corporate news, Remy Cointreau, a French spirits group (EPA:RCOP), reported an operating profit for the fiscal year 2022/23 that exceeded expectations. Despite this positive performance, the company maintains a cautious outlook for the current year due to anticipated weaker demand in the U.S. market.

Oil prices initially experienced a decline, but later rebounded as the positive private survey on Chinese manufacturing activity sparked hopes of an economic recovery in the world’s largest crude importer.

Earlier, concerns arose after data from the American Petroleum Institute revealed an unexpected substantial increase of approximately 5.2 million barrels in U.S. crude stocks last week, raising fears of oversupply in the world’s largest consumer.

As of 02:00 ET, U.S. crude futures traded 0.4% higher at $68.36 per barrel, while the Brent contract rose by 0.5% to $72.98.

Furthermore, gold futures witnessed a slight decrease of 0.1%, reaching $1,979.55 per ounce, and the EUR/USD currency pair traded 0.1% lower at 1.0678.

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