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European Stock Futures Edge Lower; Corporate Earnings, U.S. CPI Due -Breaking

by Mike Robinson

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© Reuters.

Peter Nurse 

Investing.com: European stock markets will open lower on Wednesday due to caution before the U.S. releases key inflation data and fresh worries about the Chinese property market. 

At 02:05 GMT (0705 GMT), Germany’s contract traded 0.1% lower while France fell 0.1%. The U.K contract was down 0.1%.

Both sides of the Atlantic are keeping an eye out for the Wednesday release. This is because they fear that higher inflation could prompt the Federal Reserve’s decision to increase interest rates sooner than anticipated.

The headline annual rate was 8.6%, while the core rate was 6.8%. This is nearly double the rate recorded in data released Tuesday.

High inflation was a theme that continued Wednesday as data from China revealed that October’s level of inflation rose to 4.5% for the year, an impressive jump from September’s 4.1%. 

A cautionary note is also being issued by Fantasia Holdings, a developer in China. It warned Wednesday that China’s property market might be at risk. The country’s biggest developer China Evergrande Group faces its biggest solvency test yet Wednesday with over $148 million of coupon payments due on three dollar bonds.

The European Corporate Earnings Day is also busy today. French bank Credit Agricole PA: reported a better-than-expected profit for the third quarter, thanks to lower provisions related to bad loans and pandemics.

German insurer Allianz’s profit (DE:) also exceeded expectations. It rose 2.3% while ABN AMRO (AS:), the Dutch bank, reported an unexpected 14% gain in its third quarter profit.

After industry data revealed a surprising 2.5 million barrel drop in stocks, crude oil prices rose once again on Wednesday. It reinforces the notion that demand will continue to rise and supply will remain limited.

It was expected that there would be a build of around 1.9 million barrels. Data from the United States will be available at 10:30 ET. 

By 2:05 AM ET, U.S. crude futures traded 0.3% higher at $84.42 a barrel, having gained 2.7% on Tuesday, while the contract rose 0.7% to $85.37, adding to the previous session’s 1.6% gain. Both contracts were closed at the highest level since Oct. 27,

Also, the price rose 0.2% at $1,827.55/oz and traded 0.1% higher to 1.1575

 

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