European markets to open higher as Fed rate cut expectations rise
European markets are seen opening cautiously higher Thursday after weaker-than-expected U.S. economic data gave investors cause to anticipate that the Federal Reserve will cut interest rates at its upcoming July meeting.
The FTSE 100 is expected to open fractionally higher at 7,611, while Germany’s DAX is set for around a 12 point rise to 12,629 and France’s CAC 40 is expected to nudge 3 points higher to 5,622, according to IG data.
The Dow Jones Industrial Average and Nasdaq Composite both closed Wednesday’s session at all-time highs after U.S. private payrolls data fell significantly short of expectations, strengthening the Fed’s case for lowering rates at its monetary policy meeting at the end of July. Markets stateside are closed Thursday for the Fourth of July holiday.
Asia Pacific stocks traded mixed on Thursday, with major indexes in Japan, South Korea and Australia advancing while mainland Chinese and Hong Kong markets slipped.
In trade war news, White House economic adviser Larry Kudlow told reporters on Wednesday that face-to-face trade talks between the U.S. and China will continue in the coming week.
Meanwhile, tensions between Washington and Tehran continued to escalate with U.S. President Donald Trump telling Iran via Twitter that threats can “come back to bite you ” after Iranian President Hassan Rouhani announced that Iran would enrich its uranium, breaching a 2015 nuclear deal.
Back in Europe, Italy averted European Union disciplinary action over its public finances Wednesday after convincing the European Commission that measures submitted this week would help bring its growing debt into line with EU fiscal rules.
In corporate news, Walmart-owned British supermarket chain Asda signaled that a possible stock market listing could take place in two to three years.
Reuters reported that Deutsche Bank is preparing a sweeping 5 billion euros ($5.6 billion) overhaul in the coming days that will see the ax fall heavily on its investment banking business.
Euro area retail sales data for May is due at 10 a.m. CET.
Source: Reuters
