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European Stock Futures Edge Lower; Geopolitical Risks Rise

Stock Markets Aug 09, 2022 16:26
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By Peter Nurse

Investing.com - European stock markets are expected to open slightly lower Tuesday amid caution ahead of key U.S. inflation data as well as rising geopolitical tensions.

At 02:00 AM ET (0600 GMT), the DAX futures contract in Germany traded 0.3% lower, CAC 40 futures in France dropped 0.1%, and the FTSE 100 futures contract in the U.K. fell 0.2%.

Stock indices in Europe have pushed higher in recent sessions, helped by generally positive corporate earnings as well as the hope that the Federal Reserve will shortly get less aggressive with its interest rate increases in the wake of the U.S. economy, the world’s largest, entering a technical recession.

A drop in inflation could be a sign the economy is cooling enough for the Fed to ease its current tightening pace, which brings Wednesday’s consumer price index firmly into focus.

U.S. CPI is expected to come in at 8.7% for July, down slightly from the 9.1% seen in the prior month. Such a dip could indicate that inflation has peaked, but it would still remain at its highest level in forty years.

Also prompting caution Tuesday are rising geopolitical tensions, with the United Nations secretary-general warning that the shelling of Europe’s largest nuclear power station in Ukraine could have very serious consequences.

Additionally, Taiwan's foreign minister said earlier Tuesday that China was using the military drills it launched in protest against U.S. House Speaker Nancy Pelosi's visit as an excuse to prepare for an invasion of the island.

Such a move would have a weighty impact on relations between the globe’s two economic superpowers.

In corporate news, earnings are due from the likes of InterContinental Hotels Group (LON:IHG) and investment company Abrdn (LON:ABDN).

Oil prices edged higher Tuesday as investors digest the resumption of talks to revive the 2015 Iran nuclear accord, which could potentially result in the Persian country’s crude exports returning to the global market.

European Union diplomats presented the US and Iran late Monday with a final draft accord to revive the 2015 deal, with a senior EU official stating that a final decision was expected within "very, very few weeks".

Such a deal could result in Iran boosting its oil exports by around 1 million barrels per day, but agreement has proved difficult to reach in the past.

Weekly U.S. oil inventory data from the American Petroleum Institute is due later Tuesday, ahead of the official data from the Energy Information Administration on Wednesday.

By 02:00 AM ET, U.S. crude futures traded 0.1% higher at $90.88 a barrel, while the Brent contract rose 0.1% to $96.75.

Additionally, gold futures fell 0.1% to $1,804.40/oz, while EUR/USD traded 0.1% higher at 1.0200.

European Stock Futures Edge Lower; Geopolitical Risks Rise
 

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