European Stock Futures Higher; Fed Decision, ECB and BOE Meetings in Focus

By Peter Nurse 

Investing.com - European stock markets are expected to open higher Thursday as investors digest the Federal Reserve’s move to tackle inflation, ahead of policy decisions by both the European Central Bank and the Bank of England.. 

At 2 AM ET (0700 GMT), the DAX futures contract in Germany traded 0.6% higher, CAC 40 futures in France climbed 1.5% and the FTSE 100 futures contract in the U.K. rose 0.4%.

The U.S. central bank announced late Wednesday that it will double the pace of its asset tapering program to $30 billion a month and projected three quarter-point interest-rate increases in 2022. 

This suggested the Fed policymakers considered the U.S. economy strong enough to handle the Omicron variant as well as monetary policy tightening while they moved to tackle high levels of inflation.

"The economy no longer needs increasing amounts of policy support," Fed Chair Jerome Powell said in a news conference after the conclusion of the two-day policy meeting. 

There’s more central bank activity in Europe Thursday, with both the European Central Bank and the Bank of England having to strike a balance between the need to support economies threatened by the Covid-19 virus with the desire to combat inflationary pressures.

The BoE is seen as the more likely of the two to tighten monetary policy after data on Wednesday showed British consumer price inflation surged in November to its highest in more than 10 years.

Economic data in focus Thursday will center around flash December purchasing manager’s index numbers across the Eurozone and U.K., with the releases set to reflect the imposition of Covid restrictions and partial lockdowns in many regions.

In corporate news, Telecom Italia (MI:TLIT) is likely to be in the spotlight after Reuters reported that the Italian phone group's top investor Vivendi (OTC:VIVHY) is considering pushing for a board reshuffle in an attempt to oust former CEO Luigi Gubitosi.

Elsewhere, Volkswagen (DE:VOWG_p) could also be in focus after Manager Magazin reported that its sales are expected to fall below 9 million vehicles this year as semiconductor bottlenecks weigh on production. The German auto giant had unit sales of just under 11 million in 2019.

Novartis (SIX:NOVN) is launching a new share buyback worth up to $15 billion to be executed by the end of 2023, the Swiss drugs giant said, adding it was confident in its top-line growth and deep pipeline.

Oil prices rose Thursday after U.S. crude stockpiles fell the most since September, suggesting demand remained strong in the world's largest consumer even as the Omicron variant of the Covid-19 virus threatens to curb global consumption. 

U.S. crude inventories shrunk by 4.58 million barrels last week, according to a report from the Energy Information Administration released late Wednesday. This was a much larger drop than an industry report from the American Petroleum Institute had indicated on Tuesday.

By 2 AM ET, U.S. crude futures traded 1.3% higher at $71.81 a barrel, while the Brent contract rose 1.2% to $74.77. 

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Additionally, gold futures rose 1.2% to $1,785.20/oz, while EUR/USD traded 0.1% higher at 1.1296.