European Stocks Seen Higher On Fed Bets

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European stocks are poised to open higher on Thursday after disappointing U.S. retail sales data and signs of low inflationary pressures in the world’s largest economy virtually closed the dollar for an early rate rise by the Federal Reserve. Asian stocks hit two-month highs, with Chinese, Hong Kong and Japanese shares leading the region’s gains on expectations the Fed will delay an interest-rate increase into next year.

The Bank of Korea today reduced its forecasts for inflation and economic growth while keeping its key interest rate unchanged at a record low for a fourth straight month. The Bank of Indonesia is also expected to leave its benchmark rate unchanged at 7.5 percent when it meets later today.

Australia’s unemployment rate held steady in September, government figures showed, helping push the Australian dollar back above US73¢.

Crude-oil prices held in a tight range in Asian deals ahead of weekly inventory data from the Energy Information Administration (EIA) due later in the day. Gold held steady near 3-1/2-month high as the dollar struggled near multi–week lows.

In economic releases, investors eye U.S. reports on consumer prices, jobless claims and regional manufacturing for further clues on the health of the economy. On the earnings front, Citigroup ( C), Goldman Sachs (GS) and UnitedHealth (UNH) are among the prominent companies due to unveil their quarter results before the U.S. opening bell.

European Commission President Jean-Claude Juncker will hold talks with British Prime Minister David Cameron today to discuss key areas of EU reform. In the U.K., newly-elected opposition leader, socialist Jeremy Corbyn, has suffered a rebellion in the first major Commons test of loyalty to his leadership last night.

In corporate news, French media and music company Vivendi announced that it has taken equity stakes of 6.6 percent and 6.2 percent respectively in Ubisoft and Gameloft, with a view to utilizing its available cash.

BHP Billiton said it has issued hybrid securities worth about $6.5 billion in dollar, euros and pounds to refinance its debt.

Swiss crop chemicals major Syngenta AG reported a 12 percent drop in third-quarter group sales, weighed down by currency volatility in Brazil and tight credit conditions.

The European markets fell for a third day on Wednesday as tepid consumer and producer inflation data out of China spurred new concerns about deflationary pressures in the world’s second-largest economy. Weak business updates from ASML Holding and Skanska also dented investor sentiment. The German DAX and the U.K.’s FTSE 100 both dropped around 1.2 percent each while France’s CAC 40 index fell 0.7 percent.

U.S. stocks fell overnight, with a weak profit forecast from Wal-Mart Stores, disappointing results from JPMorgan and lackluster retail sales and producer price figures weighing on the markets. The Dow dropped 0.9 percent, the tech-heavy Nasdaq slid 0.3 percent and the S&P 500 shed half a percent.

 

 

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