European stock futures higher; German, Spanish inflation data in focus

Investing.com - European stock markets are expected to open with small gains Monday ahead of the release of Spanish and German inflation data, at the start of a week that includes several central bank meetings, including the U.S. Federal Reserve.

At 02:10 ET (07:10 GMT), the DAX futures contract in Germany traded just higher, CAC 40 futures in France climbed 0.3% and the FTSE 100 futures contract in the U.K. rose 0.6%.

Central banks in focus

Investors are awaiting interest rate decisions from the Bank of Japan, the Bank of England and most importantly the Federal Reserve this week, looking for guidance about future interest rate decisions.

The European Central Bank ended the longest streak of interest rate rises in its 25-year history last week, leaving its main policy rate at 4% and stating current borrowing costs may be just enough to tame inflation if they stay at current levels for "sufficiently long".

There was some evidence of German inflation retreating, with data released early Monday showing that consumer prices rose 3.1% in October on an annual basis in the state of North Rhine Westphalia, Germany’s most populous state, a drop from 4.2% the prior month.

The other German states are set to release their inflation figures later in the session, along with Spain, and this could provide clues as to future ECB policy decisions.

Action-packed week ahead

The week also includes key economic activity readings from China, the monthly U.S. labor report as well as major U.S. third-quarter earnings, particularly from iPhone maker Apple (NASDAQ:AAPL).

Investors will also keep an eye on developments in the Middle East as Israel launched a large-scale ground assault on Gaza over the weekend but there appeared to be no broader spillover in the Middle Eastern conflict.

HSBC reports sharp rise in quarterly profit

In corporate news, HSBC (LON:HSBA), Europe’s largest bank, reported a third-quarter pretax profit of $7.7 billion, versus $3.2 billion a year earlier, as higher interest rates boosted the bank's profitability and helped it fund a fresh $3 billion share buyback.

However, this was still below the $8.1 billion expected because of higher costs, with the lender indicating costs are likely to increase by 4% this year, more than its previous goal of a 3% rise.

Crude falls at start of a busy week

Oil prices fell Monday as traders adopted a cautious stance at the start of a week that includes a Federal Reserve policy meeting as well as key U.S. and Chinese economic data.

By 02:10 ET, the U.S. crude futures traded 1.3% lower at $84.44 a barrel, while the Brent contract dropped 1% to $88.33 a barrel.

Both benchmarks ended Friday up 3% after Israel stepped up a ground assault on Gaza, but the contracts still registered hefty losses over the course of the week as there were few signs that this conflict will expand into a wider regional war.

Additionally, gold futures rose 0.4% to $2,005.75/oz, while EUR/USD traded just lower at 1.0563.