European stock futures higher; sentiment boosted after ECB meeting

© Reuters.

Investing.com - European stock markets are expected to edge higher at the open Friday, continuing the previous session’s positive tone on the prospect of the European Central Bank pausing its cycle of monetary tightening as soon as September.

At 02:00 ET (06:00 GMT), the DAX futures contract in Germany traded 0.3% higher, CAC 40 futures in France climbed 0.5% and the FTSE 100 futures contract in the U.K. rose 0.2%.

ECB hints at pausing rate hikes

European stocks posted healthy gains on Thursday, with the DAX climbing 1.7% and the CAC 40 over 2%, as investors begin to position for the European Central Bank pausing its series of interest rate hikes.

The ECB raised interest rates by 25 basis points to a 23-year high on Thursday, as widely expected, but President Christine Lagarde surprised the market by hinting that this tightening run, which currently consists of nine consecutive rate hikes, could soon be coming to an end.

"Do we have more ground to cover? At this point in time I wouldn't say so," Lagarde said during the press conference that followed the most recent rate increase, while stressing that the ECB's decisions would depend on incoming data.

European inflation data in focus

There is plenty of economic data for investors to study Friday, including important inflation numbers from France and Germany, the two largest economies in the eurozone.

Data released earlier Friday showed that inflation in the German state of North Rhine-Westphalia, the country’s most populous state, rose 0.2% on the month in July, an annual rise of 5.8%, below the 6.2% expected.

Additionally, French gross domestic product climbed 0.5% in the second quarter, an improvement from the revised 0.1% growth in the previous quarter, and also better than expected.

Earnings season continues 

Turning to the corporate sector, Swiss specialty chemicals maker Clariant (SIX:CLN) impressed with its second-quarter core profit, helped by price hikes in catalysts as well as adsorbents and additives businesses.

French concessions and construction group Vinci (EPA:SGEF) reported a jump in its half-year core profit, boosted by recovering traffic at its airports, while Amundi (EPA:AMUN), Europe's biggest fund manager, posted better-than-expected quarterly net inflows.

Oil prices slip back from three-month highs

Oil prices retreated Friday from recent highs, but remained on course for another positive week after the release of data showing that the U.S. economy grew more than expected in the second quarter, driving down fears of a recession that could potentially dent oil demand this year.

The data also came amid increasing signs of tightness in the oil market, as the effects of production cuts by Saudi Arabia and Russia began to be felt. 

By 02:00 ET, the U.S. crude futures traded 0.3% lower at $79.83 a barrel, while the Brent contract dropped 0.4% to $83.45. 

Both contracts were set to add between 2.5% and 3.5% this week, their fifth straight positive week, having climbed to three-month highs during the previous session.

Additionally, gold futures rose 0.3% to $1,951.55/oz, while EUR/USD traded 0.1% higher at 1.0981.