Stocks - Europe Seen Higher on Signs of Global Economic Recovery

By Peter Nurse

Investing.com - European stock markets are seen edging higher at the open Monday, helped by positive economic news out of both China and the U.S.. However, trading ranges are likely to be tight as the earnings season winds down and focus remains on U.S. lawmakers over additional stimulus.

At 2:15 AM ET (0615 GMT), the DAX futures contract in Germany traded 0.5% higher, the FTSE 100 futures contract in the U.K. rose 0.4%, while CAC 40 futures in France climbed 0.6%.

China saw its factory deflation ease in July, according to data released earlier Monday, boosting hopes of economic recovery in the world's second biggest economy.

The country reported a higher-than-expected consumer price index for July, with increases of 2.7% and 0.6% year-on-year and month-on-month respectively. July’s producer price index also beat the previous month's figure, although it fell 2.4% year-on-year. The PPI has now registered a full year of year-on-year declines.

This follows on from Friday’s U.S. jobless report coming in slightly better than analysts had forecast, and news on Saturday that U.S. President Donald Trump signed a series of executive orders to extend unemployment benefits, to a certain extent, after talks with Congress broke down.

“I view this as another step in negotiations rather than a cessation of negotiations, with a still unknown timeline,” JPMorgan (NYSE:JPM) analyst Andrew Tyler said in a note, reported by Reuters.

“If we see the White House take the view that they no longer want to negotiate until after the election, then think we’ll see a wave of GDP downgrades followed by lower realized spending and spikes to unemployment in September through year-end.”

Important economic data are thin on the ground in Europe Monday, while the corporate earnings season is entering its final stretch.

Capita could be of interest after stating Monday that it has secured a 355 million pounds ($463.3 million) extension to its contract with Transport for London to continue to manage London's congestion charge, low and ultra-low emission zones.

Oil prices pushed higher Monday, helped by a bullish picture of demand from state-controlled Saudi Aramco (SE:2222), the largest oil producer in the world.

The company’s Chief Executive Amin Nasser said on Sunday that oil consumption in Asia, Aramco’s largest regional market, has almost returned to pre-coronavirus levels, and he sees oil demand increasing as economies gradually open up after the easing of coronavirus lockdowns.

U.S. crude futures traded 1.5% higher at $41.83 a barrel, while the international benchmark Brent contract rose 1% to $44.83.

Elsewhere, gold futures rose 0.8% to $2,034.10/oz, recovering a touch after Friday’s sharp selloff on the back of the better-than-expected July jobs report. The contract hit an all-time high of $2,072.5 last week. EUR/USD traded 0.1% higher at 1.1798.

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