European markets seen opening higher as earnings, ECB meeting takes center stage

European markets are expected to rise at Thursday’s open as earnings season helps offset concerns surrounding rising yields in the U.S.

The FTSE 100 is seen rising 13 points at 7,393, the CAC is expected to open 26 points higher at 5,440, while the DAX is poised to start the day up 66 points at 12,488, according to IG.

While earnings season is keeping investors busy across markets worldwide, another topic that’s been taking up space in investors’ minds is that of rising yields. On Tuesday, the U.S. 10-year treasury yield topped 3 percent and continued to extend gains on Wednesday.

Investors around the world have been fixated on the 10-year note yield as of late, with concerns looming that hitting the 3 percent barrier could trigger a reaction from financial markets both in the U.S. and internationally.

While breaking the psychological barrier did initially trigger a negative reaction from markets on Wednesday, indexes have since shown signs of bouncing back. In the U.S., stocks finished mostly higher on the back of positive earnings, while in Asia, markets were relatively mixed.

With yields rising, market participants are wondering what this will mean for the global economy, with many expecting this to mean higher interest rates from central banks.

Switching focus to Thursday’s session, a slew of earnings are due to be published throughout the day. Nokia, Orange, Total, Deutsche Bank, Lufthansa, Volkswagen, Fiat Chrysler, Banco de Sabadell, Roche, Shell, Barclays, Shire, and Taylor Wimpey are all slated to release financial updates.

But earnings season wasn’t the only dish on the menu for markets on Thursday. During Europe’s session, investors will be turning their attention to Frankfurt, where the European Central Bank (ECB) is due to announce its latest monetary policy decisions, followed by a press conference.

While the ECB is expected to hold steady on its current monetary policies, investors will be paying close attention to the press conference where President Mario Draghi is expected to deliver remarks on the current economic state of the euro zone.

Other topics that Draghi may touch upon include the bond market, trade, economic data, and the euro. The central bank’s rate decision is scheduled for 12:45 a.m. London Time (7:45 a.m. ET), followed by the conference due to begin at 1:30 p.m. London time (8:30 a.m. ET).

In the latest surrounding politics, French President Emmanuel Macron called upon the U.S. to engage more with the rest of the world and to combat nationalism. The European leader also went onto say that, while not perfect, the Iran nuclear deal must remain intact until a replacement is established; Reuters reported.

Now attention will turn to Germany, as Chancellor Angela Merkel is set to head to the States this week.

No major economic data out of Europe is scheduled for Thursday’s session.

Source: CNBC

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