European Stock Futures Lower; U.K. GDP Disappoints Ahead of Key U.S. Data By

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By Peter Nurse – European stock markets are seen opening marginally lower Tuesday, weighed on by some patchy growth data out of the U.K. but generally cautious ahead of key U.S. inflation numbers.

At 3:15 AM ET (0715 GMT), the contract in Germany traded 0.1% lower, in France dropped 1% and the contract in the U.K. fell 0.2%. 

U.K. grew just 0.4% in March, below the expected 0.6%, and still down 7.8% on the year, marking a slow recovery from the ravages of the coronavirus pandemic. 

This followed robust trade data out of China, suggesting the recovery in the world’s second largest economy will continue to gather momentum as it emerges from the Covid-19-led slump.

Chinese grew 30.6% year-on-year in March, while growth surged to the highest level in four years, jumping 38.1% year-on-year last month.

Europe also sees the release of the closely-watched German data later Tuesday, but most eyes Tuesday will be on the release of the for March, due at 8:30 AM ET (1330 GMT). This is expected to show inflation increasing by 0.5% on the month, or 2.5% year-over-year, up from 1.7% in February.

Federal Reserve officials have said repeatedly that they are prepared to look through periods of inflation climbing above its 2% threshold without changing their accommodative policy stance, as they see these episodes as being temporary in nature.

However, the last time the annual headline CPI number was at 2.5% was in January 2020, before the Covid pandemic, and a figure significantly above this will certainly put the pressure on the Fed.

Back in Europe, the death toll across the continent from the Covid-19 virus passed the grim milestone of one million people on Monday.

In corporate news, Givaudan (SIX:) is likely to be in the spotlight after the Swiss company confirmed its mid-term targets after like-for-like sales rose 7.7% in the first quarter, helped by strong demand for its fragrance and beauty products. 

Airbus (PA:) will also be in focus after the airline manufacturer announced a shake-up on Monday, with both its defense and technology chiefs set to step down and a new chief operating officer to be appointed.

Oil prices edged higher Tuesday, helped by the robust Chinese trade data, indicating continued economic recovery in the world’s largest crude importer,  and tensions in the Middle East after the Yemen-based Houthi movement said it fired missiles on Saudi oil sites.

Attention Tuesday will also be on oil supply data from the , due later in the day, with supply data set to follow a day later.

U.S. crude futures traded 0.4% higher at $59.93 a barrel, while the contract rose 0.4% to $63.55. 

Elsewhere, fell 0.4% to $1,726.50/oz, while traded 0.1% lower at 1.1898.


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