European Equities Seen Headed For Cautious Opening

Markets across Europe are expected to open cautious as fresh bets on Fed’s tapering timeline in the backdrop of recent price and jobs data as well as lingering concerns on delta spread are expected to keep any irrational exuberance in check.

Overnight, the Nasdaq 100 had closed at 15,088.98, up by 0.41 percent whereas the Dow Jones Industrial Average’s final reading for Thursday was 35,499.85, higher by 0.0.04 percent over previous close. Markets continued to weigh-in the strong jobless claim numbers and the surge in producer prices, warranting speculation of imminent tradeoff between recovery and rundown inflation.

On Thursday, the European bourses had seen another positive day with the DAX and Stoxx 600 setting new record highs despite worries about the delta variant. DAX 30 had rallied 0.70 percent, CAC 40 had advanced by 0.36 percent, SMI 20 had gained 0.33 percent whereas the pan-European Stoxx 600 had moved up by 0.11 percent. The FTSE 100 however had declined 0.37 percent.

In today’s morning trade, Asia / Pacific markets are trading mixed as regulatory tightening in China and delta fears dampened sentiment. New Zealand’s NZX50 is higher by 0.67 percent, India’s BSE Sensex is up 0.46 percent, Australian ASX 200 is higher by 0.44 percent whereas Japan’s Nikkei 225 is flat at 0.06 percent uptick. Trending lower are China’s Shanghai Composite which is down 0.33 percent, Hong Kong’s Hang Seng which is down 0.85 percent and South Korea’s Kospi which is down 1.32 percent.

Crude Oil Futures, Brent and West Texas Intermediate continued downward sentiment after International Energy Agency warned of slowdown in demand recovery in the backdrop of the delta variant induced re-imposition of restrictions. Brent futures for October delivery is currently trading at $70.82 versus previous close of $71.31.

Gold bounced back marginally from the four-month low of $1728.71 per troy ounce on August 10 and is currently trading at $1755.23 as it seeks to find safe haven in the delta variant fears, given the resilience of the greenback.

Dollar index is currently at 92.964, close to the four-month high of 93.06 hit on August 10 amidst strong labor market data. Thursday’s data had indicated that the number of Americans filing claims for jobless benefits fell for a third straight time last week that reignited talks of reversal of stimulus measures.

Earnings updates are due from Severstal, Rosneft Oil Company, Recipharm AB, Olav Thon Eien, Norwegian Finance, Deutsche Wohnen, Knorr Bremse, Natixis, GEA group etc.

Major data expected from France are Q2 unemployment rate, seen at 7.9% versus previous reading of 8.1% and the July YOY CPI Inflation rate seen at 1.2% versus 1.5% previously. Harmonized Index of Consumer Prices (HICP) M-o-M for July will also be keenly watched.

Wholesale prices data (WPI) for the month of July are due from Germany whereas Producer and Import prices for July are due from Switzerland.

Balance of Trade for June from Euro Area is due during the day, the forecast being at 18.2 billion euros versus previous reading of 7.5 billion euros.

U.S. Bureau of Labor Statistics’ Export and Import Prices for July and Preliminary numbers of the University of Michigan’s Survey of Consumers covering consumer sentiment, inflation sentiments etc. for the month of August will also be released during market hours. Baker Hughes will release Oil Rig Count and Total count later in the day. FOMC minutes are due on Wednesday, 18 August.