Nov 7, 2023: European stock markets are expected to open lower Tuesday, as investors digested weak Chinese trade data and more quarterly corporate earnings.
At 02:05 ET (07:05 GMT), the DAX futures contract in Germany traded 0.3% lower, CAC 40 futures in France dropped 0.5% and the FTSE 100 futures contract in the U.K. fell 0.3%.
Chinese trade data disappoints
European equities are set to follow their Asian counterparts lower after data released earlier Tuesday highlighted continued headwinds for the Chinese economy, the second largest in the world.
Chinese exports slid 6.4% year-on-year in October, accelerating from a 6.2% drop in the prior month, while the country’s trade surplus fell to its worst level since May 2022, at the height of the COVID-19 pandemic.
The drop in exports signaled worsening overseas demand, particularly from China’s biggest trade destinations – Europe and the U.S..
Adding to the negative sentiment, the Reserve Bank of Australia hiked interest rates earlier Tuesday, citing a slower-than-expected decline in inflation.
German industrial production contracts sharply
Evidence of this weak economic conditions in Europe came with the release of German industrial production figures for September, which fell 1.4% on the month.
This followed on from a revised 0.1% fall the prior month and illustrates the difficulties the eurozone’s dominant economy is suffering
Eurozone September producer prices are scheduled for release later in the session, and are expected to rise 0.5% on the month, a 12.5% drop on an annual basis.
UBS reports hefty quarterly loss
In corporate news, UBS (SIX:UBSG) reported a $785 million third-quarter loss on Tuesday, much higher than expected, after booking $2.1 billion in expenses tied to the Swiss bank’s takeover of rival Credit Suisse.
French IT consulting group Capgemini (EPA:CAPP) posted a 1.3% fall in third quarter revenue, as conditions remained “challenging” and with revenues declining in the North American region.
Results will also be studied from the likes of Deutsche Post (ETR:DHLn), Associated British Foods (LON:ABF), Metro Bank (LON:MTRO) and Direct Line (LON:DLGD).
Crude slips after weak Chinese trade data
Oil prices fell Tuesday after the disappointing trade data from China raised concerns over sluggish demand in the world’s largest oil importer.
Chinese exports fell more than expected in October amid worsening overseas demand, while an unexpected rise in imports saw China’s trade surplus shrink to its worst level in 17 months.
This prolonged weakness in exports could stymie growth in the country going forward and thus dent oil demand.
By 02:05 ET, the U.S. crude futures traded 1.1% lower at $79.94 a barrel, while the Brent contract dropped 1.1% to $84.25 a barrel.
Both contracts were nursing steep losses over the past week, amid growing expectation that the Israel-Hamas war will not disrupt supply in this oil-rich region.
Additionally, gold futures fell 0.6% to $1,975.80/oz, while EUR/USD traded 0.2% lower at 1.0696.
Source Courtesy: Investing.com