European Stocks Edge Higher; ECB Meeting in Focus

Tradehay.com: 21/01/2021 - 09:40

Investing.com -- European stock markets are seen opening just higher Thursday, amid cautious optimism following the inauguration of U.S. President Joe Biden and ahead of the latest ECB policy meeting.

At 2:05 AM ET (0705 GMT), the DAX futures contract in Germany traded 0.2% higher, CAC 40 futures in France climbed 0.1% and the FTSE 100 futures contract in the U.K. rose 0.1%.

President Biden took office on Wednesday, prompting record high closes on Wall Street, amid strong expectations of more economic stimulus from the new administration. Markets pushed higher as the event passed off without incident. 

The incoming president has already proposed a $1.9 trillion fiscal stimulus plan, but although the Democrats have taken control of Congress they are still likely to need a degree of Republican support to pass the program. 

Back in Europe, the European Central Bank is expected to keep interest rates and the pace of bond purchases unchanged later Thursday, given that it eased its policy substantially only last month.

That said, governments throughout the continent are preparing for a prolonged period of Covid-19 restrictions with the virus proving to be very hard to contain, with Germany seeing a record number of daily deaths.

The third pandemic lockdown appears to be having little impact on rates of the coronavirus in England, researchers warned on Thursday, with prevalence of the disease "very high" and "no evidence of decline" in the first 10 days of renewed restrictions.

On the data front, France’s business climate data for January and Italy’s industrial sales and orders for November are due later Thursday, while trading updates from the likes of software company Sage (LON:SGE), and Channel Tunnel operator Getlink (PA:GETP) will be studied carefully. Sports betting company Entain (OTC:GMVHY) meanwhile reported a 41% gain in online gaming revenue in the fourth quarter, news that may reassured shareholders after MGM dropped its offer to buy the company after Entain's management dismissed it as too low.

Oil prices weakened Thursday after a surprise rise in U.S. crude stocks reignited concerns about the impact on demand from the pandemic in the world’s largest consumer.

U.S. crude oil inventories rose 2.6 million barrels last week, according to data from the American Petroleum Institute, an industry group, compared with the 300,000-barrel draw in forecasts prepared by Investing.com, and the 5.821-million-barrel draw recorded during the previous week.

The U.S. Energy Information Administration is due to release its weekly inventory report on Friday, two days later than usual due to the holiday and the inauguration.

U.S. crude futures traded 0.3% lower at $53.17 a barrel, while the international benchmark Brent contract fell 0.3% to $55.94. 

Elsewhere, gold futures rose 0.3% to $1,872.55/oz, while EUR/USD traded 0.2% higher at 1.2128.