European Markets Seen Opening Weak

Markets in Europe are expected to open on a subdued note on Monday despite positive sentiment created by robust corporate earnings and Wall Street’s strong rally on Friday. Caution prevails ahead of the CPI data due from the U.S. on Wednesday and the Bank of England’s interest rate decision due on Thursday. Markets in the U.K. are closed for a holiday.

Wall Street had closed with strong gains on Friday amidst a sharp rebound in regional banks and solid jobs data that ruled out fears of a recession. The Nasdaq Composite surged 2.3 percent to close at 12,235.41. The Dow Jones Industrial Average added 1.65 percent to finish trading at 33,674.38.

The strong positive sentiment from Wall Street impacted sentiment at the European bourses and markets in the region too closed with strong gains on Friday. Germany’s DAX surged 1.44 percent. France’s CAC 40 rallied 1.3 percent. The pan-European Stoxx-600 added more than 1 percent. U.K.’s FTSE 100 added 0.98 percent. Switzerland’s SMI finished 0.85 percent higher.

Current indications from the European stock futures indicate a mixed sentiment. The DAX Futures (Jun) is currently trading 0.01 percent lower. The CAC 40 Futures (May) is trading 0.13 percent lower. The pan-European Stoxx 50 Futures (Jun) is trading 0.20 percent lower. The SMI Futures (Jun) is also trading 0.10 percent lower. The FTSE 100 Futures (Jun) is however trading 1.10 percent higher.

American stock futures are also trading in negative territory. The US 30 (DJIA) is down 0.04 percent whereas the US500 (S&P 500) is trading 0.07 percent lower.

Asian stock markets are trading mostly higher tracking Friday’s gains in Wall Street. China’s Shanghai Composite rallied 1.8 percent. Hong Kong’s Hang Seng and India’s Nifty 50 have both gained 0.9 percent. Australia’s S&P ASX 200 gained 0.8 percent. New Zealand’s NZX 50 has gained close to half a percent. South Korea’s KOSPI has added 0.6 percent. Japan’s Nikkei 225 is however trading 0.7 percent lower.

The Dollar Index (DXY), a measure of the Dollar’s strength relative to six currencies, slipped to 101.10, down 0.11 percent on an overnight basis, taking cues from the Fed’s recent hints of a pause in rate hikes. The EUR/USD pair has increased 0.25 percent to 1.1044 whereas the GBP/USD pair has gained 0.09 percent to trade at 1.2652.

Amidst the Dollar’s weakness, gold prices rebounded from losses following strong jobs data from the U.S. on Friday. Gold Futures for June settlement are trading at $2,031.50 per troy ounce, up 0.33 percent on an overnight basis.

Crude prices rebounded after heavy losses in the previous two weeks. Brent Crude Futures for July settlement increased 0.52 percent to $75.69 whereas WTI Crude Futures for June settlement increased 0.60 percent to $71.77.

Meanwhile, data released just a while ago showed Germany’s Industrial Production in the month of March at -3.4 percent, versus 2 percent in the previous month and expectations of -1.3 percent.

The BRC Retail Sales Monitor from U.K for April is also due later in the day.
Major earnings updates due on Monday from the region include Ricoh, Naturgy Energy, BioNTech, UCB, SGS and Jardine Matheson.

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