European stocks go up; news about China’s COVID and Spanish inflation are in the spotlight.
Monday was a good day for trading on European stock markets. Gains in Asia helped, as did the fact that major Chinese cities are starting to loosen restrictions on moving around. However, high inflation in Spain puts more pressure on the European Central Bank.
By 8:10 a.m. ET (4:10 a.m. GMT), the DAX in Germany was up 0.8%, the CAC 40 in France was up 0.9%, and the FTSE 100 in the UK was up 0.5%.
Asia’s stock markets sent good news to Europe’s stock markets. Both Japan’s Nikkei and Hong Kong’s Hang Seng went up by more than 2% after hearing that China had eased travel restrictions in key areas over the weekend.
Shanghai hopes to end its two-month COVID lockdown on June 1, and Beijing reopened some public transportation and malls on Sunday because the number of infections has gone down.
Tight restrictions on movement in China’s most important cities have hurt the country’s economy, which is the second largest in the world and an important export market for many European companies.
Still, gains are likely to be small on Monday because the U.S. is closed for a holiday and because Spain’s annual consumer inflation rose by more than expected in May, from 8.3% to 8.7%.
On Tuesday, the latest flash estimate of inflation in the Eurozone will be released. It is expected to hit a new record high of 7.7% in May, up from 7.4% in April. However, data from Spain suggests that it could go even higher. A significant increase would increase the likelihood that the ECB will begin to normalize its policies this summer.
In business news, S4 Capital (LON:SFOR) stock went up 2.3% after the advertising group reported a big jump in first-quarter gross profit and reaffirmed its full-year outlook, saying it expected strong demand even though the global economy was expected to grow more slowly than expected.
Ted Baker (LON:TED) stock went up 2.5% after it was said that Juicy Couture owner Authentic Brands is close to buying the U.K. fashion house for 300 million pounds ($379.35 million).
Oil prices went up on Monday, reaching new highs for the last two months. This happened even though the European Union’s plans to impose an oil embargo on Russia looked like they were about to fall apart on Monday, before a summit meeting of leaders of member states later in the day.
For any deal to go into effect, all member states must agree to it. Hungary, Czechia, and Slovakia, to a lesser extent, continue to fight against deals.
Any more restrictions on Russian oil would make an already tight market for crude oil even tighter. This is because demand is rising as the peak summer season in the U.S. and Europe is coming to an end.
By 4:10 AM ET, U.S. crude futures were up 0.9% to $116.10 per barrel, while the Brent contract went up 1.0% to $116.64 per barrel.
Gold futures rose 0.3 percent to $1,856.65/oz, while the EUR/USD rose 0.2 percent to 1.0751.
