European stock markets are seen opening mixed Friday, stabilizing after the previous session’s sharp losses ahead of the release of Eurozone inflation data for June.
At 2:05 AM ET (0605 GMT), the DAX futures contract in Germany traded 0.1% lower, CAC 40 futures in France dropped 0.1%, while the FTSE 100 futures contract in the U.K. rose 0.3%.
European markets struggled on Thursday, with the main indices all dropping around 1%, weighed down by concerns that rising Covid cases will stunt global growth just as central banks start to fret about soaring inflation.
Earlier Friday, the Bank of Japan downgraded its real GDP forecast for 2021 while keeping its monetary policy unchanged, now expecting growth of 3.8% compared with the 4.0% forecast it made in April.
Goldman Sachs (NYSE:GS) has also cut its 2021 growth forecasts Friday for most of the countries in Southeast Asia, where Covid-19 infections are surging.
This hit to growth may have a read across to European markets with Covid cases also starting to rise again here despite the population being more vaccinated on average.
With this in mind, investors will keep a close eye on the release of the latest consumer price inflation data from the Eurozone, ahead of next week’s policy-setting meeting by the European Central Bank.
The June CPI release, due at 5 AM ET (0900 GMT), is expected to see the annual figure fall back to +1.9%, dropping below the bank’s 2% target.
In corporate news, Ericsson (BS:ERICAs) is likely to be in the spotlight after the Swedish telecommunications company announced a $8.3 billion multi-year 5G deal from U.S. giant Verizon Communications (NYSE:VZ). Sportswear maker Puma (DE:PUMG) may also get some attention after raising its guidance for the year.
The auto sector is also likely to be in focus after data showed European car registrations surged in June, rising for the fourth month in row. The growth rate was chiefly a function of the collapse in sales last year when coronavirus restrictions shut car dealerships across Europe.
Elsewhere, oil prices marginally lower Friday, heading towards their worst week since mid-March on worries that the surge in new Covid-19 cases globally will hit demand, while the likelihood of a new OPEC+ production deal may lift supply at the same time.
At 2:05 AM ET, U.S. crude futures traded 0.3% lower at $71.43 a barrel, on course to fall almost 4% this week, while the Brent contract fell 0.4% to $73.21, set to drop almost 3% this week.
Additionally, gold futures fell 0.2% to $1,825.20/oz, heading for its fourth consecutive weekly gain, while EUR/USD traded 0.1% lower at 1.1804.