European Stock Futures Higher on Ukraine Summit Hopes

By: Trademagazin Date: 2022. 02. 21. 10:15

European stock markets are expected to open cautiously higher Monday, helped by fresh hopes for a diplomatic solution to the tense situation on the Ukraine border.

At 2 AM ET (0700 GMT), the DAX futures contract in Germany traded 0.8% higher, CAC 40 futures in France climbed 0.8% and the FTSE 100 futures contract in the U.K. rose 0.6%.

News of a potential summit on Ukraine between President Joe Biden and Russian counterpart Vladimir Putin has buoyed markets which have been perturbed by the possibility of a Russian invasion given its massive troop buildup near the border as well as its extended military drills in neighboring Belarus.

The two leaders have agreed in principle to a summit, French President Emmanuel Macron, who proposed the idea, said in a statement Monday. The White House said in a statement that Biden had accepted the meeting “in principle” but only “if an invasion hasn’t happened,” while the Kremlin was silent on the matter.

That said, gains are likely to be limited Monday with many details about the proposed summit uncertain and its likely success very much up in the air. Additionally, there will be no lead from the U.S. given its markets are on holiday.

Back in Europe, investors will also focus on the release of the German manufacturing PMI data for February given the importance of this sector in driving growth in the region.

Producer prices in the Eurozone’s largest economy rose by 2.2% in January, a hefty leap of 25% on the year, more than expected and an indication of the pressures the European Central Bank is under to combat inflation in the bloc.

In the corporate sector, French car parts group Faurecia (PA:EPED) forecast a rise in full-year sales, as it expects semiconductor shortages to ease from the second half of the year.

Credit Suisse (SIX:CSGN) will also be in the spotlight Monday after the leak of data on thousands of suspect accounts held at the bank in previous decades. The Swiss lender rejected any allegations of wrongdoing.

Telecom Italia (MI:TLIT) will also be in focus after the company dismissed as “unfounded and harmful” a Sunday newspaper report concerning financial targets in a plan by new Chief Executive Pietro Labriola.

Oil prices weakened on hopes that a potential summit between the leaders of Russia and the U.S. can defuse the continued tensions on the Ukraine border.

Additionally, the prospects of a nuclear deal between Iran and world powers in the near future have grown, increasing the possibility of the Persian Gulf country’s crude exports returning to the global markets.

By 2 AM ET, U.S. crude futures traded 0.4% lower at $89.86 a barrel, while the Brent contract fell 0.3% to $91.12. Both contracts last week registered their first losing week in nine, despite hitting their highest levels for over seven years earlier in the week.

Additionally, gold futures fell 0.65% to $1,890.80/oz, while EUR/USD traded 0.4% higher at 1.1369.

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