European Stock Futures Lower; Chinese PMI, Eurozone CPI Data in Focus

European stock markets are expected to start the new week on a negative note, opening largely lower Monday after weak Chinese factory activity data and ahead of the release of key Eurozone inflation data.

At 03:00 ET (07:00 GMT), the DAX futures contract in Germany traded 0.6% lower, the FTSE 100 futures contract in the U.K. fell 0.4%, while CAC 40 futures in France rose 0.2%.

Chinese manufacturing activity unexpectedly shrank in October, with the official purchasing managers index falling to 49.2, from September’s reading of 50.1, data showed earlier Monday, amid new disruptions from COVID-related lockdowns.

China’s manufacturing sector is now back in contraction territory after unexpectedly rising in September, and marked a sluggish start to the fourth quarter for the world’s second-largest economy, and a key European export market.

Back in Europe, Monday’s focus will be on the Eurozone’s October flash inflation estimate, which is expected to remain extremely elevated with a 10.2% year-on-year rise.

The European Central Bank raised interest rates by 75 basis points for the second time in a row last week, saying at the time that it expects to increase rates “further” as it continues to aggressively fight inflation. That said, there is some doubt over the size of the next hike, in December.

“We will take a significant interest step again in December,” ECB governing council member Klaas Knot said on Sunday in an interview with Dutch TV, adding it was likely that the next raise would be between 50 and 75 basis points.

German retail sales rose 0.9% on the month in September, a drop of 0.9% on the year, data showed Monday, surprising to the upside, and bodes well for the third quarter gross domestic product data for the Eurozone as a whole, due later in the session.

Away from Europe, the U.S. Federal Reserve concludes its two-day policy-setting meeting on Wednesday, and is widely expected to lift interest rates by 75 basis points once more, ahead of Friday’s U.S. jobs data.

In the corporate sector, Credit Suisse is likely to be in the spotlight after the Swiss bank announced details of its capital hike, with qualified investors having committed to buying 462 million new shares at a purchase price of 3.82 Swiss francs ($3.83), raising gross proceeds of 1.76 billion Swiss francs.

Oil prices fell Monday after the weak business activity data in China added to concerns that a resurgence in local COVID-19 cases will continue to hit demand from the world’s largest crude importer.

China’s crude oil imports for the first three quarters of the year fell 4.3% from the same period a year earlier – the first annual decline for this period since at least 2014 – as strict Covid curbs weighed on economic activity.

By 03:00 ET, U.S. crude futures traded 0.9% lower at $87.15 a barrel, while the Brent contract fell 1% to $92.89.

Additionally, gold futures rose 0.1% to $1,647.00/oz, while EUR/USD traded 0.1% lower at 0.9954.

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