European stock markets higher on optimism over recovery

Published On: May 10, 2021Categories: Stocks & Shares1.6 min read

The DAX futures contract rose 0.2%, CAC 40 futures jumped 0.3% and the FTSE 100 futures contract gained 0.3%

European stock markets are seen opening higher Monday, following the global trend, with investors optimistic about the economic recovery despite Friday’s disappointing U.S. employment report.

At 0705 GMT, the DAX futures contract in Germany rose 0.2%, CAC 40 futures in France jumped 0.3% and the FTSE 100 futures contract in the U.K. gained 0.3%.

Last week’s trading ended on an upbeat note on Wall Street, with the blue chip Dow Jones Industrial Average and the S&P 500 hitting all-time highs. This positive tone has largely continued in Asia, and Europe is expected to see the benefit Monday.

This comes despite U.S. nonfarm payrolls data on Friday showing jobs growth unexpectedly slowed in April, as the disappointing release raised expectations that U.S. interest rates would remain low for some time to come.

Recent strong U.S. economic data had started to force investors to consider that the Federal Reserve would be pushed into raising interest rates earlier than the central bank had previously outlined.

Gains aren’t likely to be substantial after the European Central Bank’s (ECB) chief economist stated that the road to recovery from the pandemic would be long for the Eurozone.

Philip Lane told French newspaper Le Monde that the unemployment rate in the bloc wouldn’t return to its 2019 level before 2023, while the Eurozone’s gross domestic product (GDP) will not return to its 2019 level before spring next year.

Elsewhere, oil prices strengthened and gasoline futures hit a near three-year high after a cyber attack on a U.S. pipeline operator resulted in a major disruption to U.S. supplies.

U.S. crude futures traded 0.7% higher at $65.37 a barrel, the Brent contract added 0.8% to $68.80, while gasoline futures on the New York Mercantile Exchange gained 1.7% to $2.1629 a gallon, jumping to the highest level since May 2018 before paring gains.

Back in Europe, the earnings season has slowed a little, although AngloGold Ashanti Monday reported an improved profit for the first quarter of the year with higher prices compensating for lower gold production and sales.

Stock exchange operator Euronext is also expected to release an update Monday.

About the Author: Jonathan Adams

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