European Stock Futures Higher as Central Bank Speakers Boost Confidence
Investors Rejuvenated by Dovish Comments
European stock markets are expected to open higher on Tuesday, as investors shift their focus to potential central bank moves and monitor the conflict in the Middle East. Global equity markets, including Europe, have experienced a degree of calm, thanks to relatively dovish comments by Federal Reserve officials. These remarks have helped settle nerves that were rattled by the deepening conflict between Israel and Hamas. Fed Vice Chair Philip Jefferson stated that the central bank could “proceed carefully” in deciding on further increases, while Dallas Fed President Lorie Logan suggested that rising Treasury yields might deter the Fed from pursuing additional rate hikes. A number of Fed officials are scheduled to speak later in the day, preceding the release of the minutes from the September monetary policy meeting on Wednesday and Thursday’s U.S. data. Furthermore, the IMF and World Bank annual meetings in Morocco are set to begin, featuring European Central Bank President.
Italian Industrial Production and PepsiCo Earnings
The economic data slate in Europe is relatively empty on Tuesday, with the main release being the August industrial production numbers, which are expected to show an annual fall of 5.0%. This deterioration from the previous month’s 2.1% drop indicates the challenges the region is facing. On the corporate earnings front, PepsiCo will be the highlight of the day, with the soft drinks giant expected to report a rise in third-quarter revenues. Additionally, the European Union plans to announce anti-subsidy investigations against Chinese steelmakers at a summit with the U.S. later this month, according to the Financial Times.
Oil Prices Slip Amid Middle East Conflict
Oil prices retreated on Tuesday, giving back some of the previous session’s sharp gains, as traders remain cautious due to the ongoing conflict in the Middle East and the potential for supply disruptions. By 02:00 ET, futures traded 0.7% lower at $85.84 a barrel, while the contract dropped 0.7% to $87.58. Both benchmarks surged more than 4% on Monday after Hamas launched a major military assault on Israel, prompting severe retaliation and air strikes. Traders are concerned that the conflict could escalate, impacting Middle East supply and worsening the expected deficit for the rest of the year. Additionally, gold rose 0.4% to $1,872.55 per ounce, while the euro traded 0.1% lower at 1.0562.