BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - Sentiment in European stock markets is expected to remain weak on Thursday amidst a hardening in global bond yields. Ten-year bond yields have increased more than a quarter percent in Germany, France, U.K., as well as Spain. The easing in crude oil prices, the momentum in tech stocks as well as toned down expectations of another Fed rate hike in October is expected to limit losses.
Despite softer-than-expected PCE inflation readings, Wall Street had closed on a mixed note on Wednesday amidst elevated treasury yields. The Dow Jones Industrial Average dropped 0.86 percent to finish trading at 50,906.05. The S&P 500 lost 0.25 percent to finish trading at 7,651.54. The tech-heavy Nasdaq Composite however rallied 0.24 percent to close trading at 26,861.06.
Major European markets had finished trading on a heavily negative note on Wednesday as elevated global bond yields and persistent inflation concerns weighed on investor sentiment . The pan-European Stoxx-50 lost 0.83 percent to finish trading at 6,267.95. Germany's DAX erased 0.79 percent to end trading at 25,199.19. Switzerland's SMI declined 0.59 percent to close trading at 13,830.34. U.K.'s FTSE 100 slipped 0.29 percent to finish trading at 10,606.00. France's CAC 40 tumbled 0.89 percent to close at 7,964.51.
Current indications from the European stock futures indicate a broadly negative sentiment. The pan-European Stoxx 50 Futures (Dec) is trading 0.29 percent below the flatline. The CAC 40 Futures (Oct) has lost 0.30 percent. The DAX Futures (Dec) is trading 0.38 percent below the flatline. The FTSE 100 Futures (Dec) has dropped 0.52 percent from the flatline. The SMI Futures (Dec) is trading 0.71 percent below the flatline.
American stock futures are however trading in positive territory. The US 30 (DJIA) is trading 0.49 percent higher, whereas the US500 (S&P 500) is trading 0.72 percent above the flatline.
Asian stock markets are trading on a mixed note amidst a decline in crude oil prices and a spike in bond yields. Japan's Nikkei 225 has jumped 3.4 percent. Australia's S&P ASX 200 has plunged 1.7 percent. DJ New Zealand has dropped 0.5 percent. India's Nifty 50 is trading 0.31 percent below the flatline. South Korea's KOSPI has jumped 1.7 percent. Equity markets in China and Hong Kong are closed for a holiday.
Despite Fed rate hike expectations declining in the wake of softer-than-expected PCE inflation, the U.S. dollar has strengthened. The Dollar Index, a measure of the U.S. dollar's strength relative to six currencies, is currently trading at 101.65, gaining 0.19 percent from 101.45 at the previous close.
The EUR/USD pair has slipped 0.11 percent to trade at 1.1318 whereas the GBP/USD pair is trading 0.14 percent lower at 1.3247. The USD/CHF pair has rallied 0.16 percent to trade at 0.8366. The EUR/GBP pair is trading 0.04 percent higher at 0.8544. The EUR/JPY pair has jumped 0.48 percent to 179.20, and the GBP/JPY pair has surged 0.43 percent to 209.73.
Both the crude oil benchmarks have declined on an overnight basis amid signs of improving energy flows from the Middle East. Brent Crude Futures for December settlement is trading at $96.61, around 1.45 percent lower than $98.03 at the previous close. WTI Crude Futures for November settlement is currently trading at $88.84, having slipped 1.75 percent from $90.42 at the previous close.
Gold jumped further as rate hike expectations from the Fed decline further in the wake of softer-than-expected PCE inflation. Gold futures for December settlement have surged 0.72 percent from the previous closing level of $4,186.70. It is currently trading at $4,216.75.
Among economic data releases due from the region on Thursday are Nationwide Housing Prices for September from the U.K., Inflation and Manufacturing PMI for September as well as Retail Sales for August from Switzerland and the Unemployment Rate for August from the Euro Area. Market spotlight would also be on the comments from ECB President Christine Lagarde at the Annual Conference of the European Systemic Risk Board.
Major updates to earnings due from the region on Thursday include Accenture, Hornbach Baumarkt, Argan, Bang & Olufsen, James Halstead as well as FW Thorpe.
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