European bourses are expected to open in the green zone on Thursday tracking the overnight gains in Wall Street and the broad-based recovery in Asian markets. Sentiment would however be influenced by the resilience of the Dollar and the geopolitical situation. Key earnings updates from the region could also weigh in on investor sentiment.
On Wednesday, European markets had rebounded on a strong support from the commodity stocks, despite a mixed earnings scorecard and geopolitical stress points.
Switzerland’s SMI surged 0.99 percent; U.K.’s FTSE 100 rallied 0.53 percent; France’s CAC 40 added 0.48 percent; Germany’s DAX gained 0.27 percent; while the pan-European Stoxx 600 closed flat.
The Wall Street had closed mostly positive on Wednesday as upbeat earnings updates lifted sentiment. Nasdaq-100 edged down 0.05 percent to close at 13,003.36 and the Dow Jones Industrial Average gained 0.19 percent to end at 33,301.93.
The FTSE 100 Futures (June) is trading 0.36 percent higher. The DAX Futures (June) is trading 0.72 percent higher. The CAC Futures (May) is trading 0.71 percent higher.
Dollar Index, which measures the strength of the Dollar against a basket of six currencies is currently at a 20-year high of 103.52. The EURUSD pair has dropped almost 0.5 percent overnight to a 5-year low of 1.0501, while the GBPUSD pair has moved 0.32 percent lower to 1.2507.
Gold Futures for June settlement dropped a further half percent and is currently trading at $1878.10 per troy ounce, versus the previous close of $1,888.7 amidst the looming interest rate hikes that have lifted the dollar further higher.
WTI Crude Futures for June settlement is trading at $100.58, an overnight drop of 1.41 percent whereas Brent Crude Futures for July settlement is trading at $103.41, down 1.47 percent from the previous close, amidst concerns over the impact of the war in Europe and the pandemic in China on future oil demand.
American stock futures point to positive trends, with the US 30 (DJIA) index up 0.25 percent and US500 (S&P 500) up 0.81 percent.
Asian markets are in the green zone after a positive closing in Wall Street on Wednesday. Japan’s Nikkei 225 Index has gained 1.54 percent; Hong Kong’s Hang Seng is trading 1.20 percent higher; Australia’s S&P ASX 200 has gained little over a percent; South Korean Kospi has gained 0.76 percent; New Zealand’s NZX 50 is trading 0.70 percent higher; India’s Nifty 50 has moved 0.40 percent higher whereas China’s Shanghai Composite has edged up 0.25 percent.
In economic data releases from the region, inflation readings from Germany would be the most watched. The consensus reading for Annual Inflation is 7.2 percent versus 7.3 percent in March, the highest reading since 1981.
Euro Area awaits the Economic Sentiment number for April, which is seen dropping to 108 from 108.5 in March.
France awaits the Unemployment Benefit Claims report for March. Initial Jobless Claims is seen rising to 5.4 thousand as compared to the 9.8 thousand-drop in February.
The speech by Bank of England Governor Andrew Bailey on Thursday would also be closely watched for cues on monetary policy and the balancing act between inflation and recession. The BoE’s interest rate review is due on Thursday, May 5.
Major earnings updates due Thursday are Unilever, Glencore, Barclays, Standard Chartered, Smith & Nephew, Schroders, St. James’s Place, Whitbread and J. Sainsbury from U.K. and Pernod Ricard, Capgemini, Thales, Sanofi, TotalEnergies and Saint Gobain from France.
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