Title: European Stock Futures Higher; German Factory Orders Rise
Jul 06, 2022 01:58AM ET
European stock markets are expected to open higher on Wednesday, regaining some confidence after a drop in the previous session triggered by growing recession fears.
At 02:00 GMT, the DAX futures contract in Germany was trading 1.1% higher, the CAC 40 futures contract in France was up 1.2%, and the FTSE 100 futures contract in the UK was up 1%.
The region's major equity indices closed with big losses on Tuesday after new survey data showed the euro zone economy is heading for contraction.
The DAX and FTSE 100 fell 2.9%, the CAC 40 dropped 2.7% and the euro tumbled to a new 20-year low against the dollar.
This weakness followed the release of the S&P Global Composite Purchasing Managers' Index for the single currency bloc, which registered its lowest reading in 16 months.
Adding to the negative sentiment was talk of gas rationing in Europe, the political crisis in the UK, and the new expansion of COVID-19 cases, which triggered new restrictions in Shanghai.
Investors are expected to look for bargains on Wednesday, reversing the negative decline, but eyes will also be on the release of eurozone retail sales data for May to try and gauge the impact of runaway inflation on consumers in the region
German factory orders helped the tone, rising 0.1% m-o-m in May, an improvement on April's revised 1.8% decline.
Oil prices rallied on Wednesday, recovering from a rout in the previous session, as the focus was on tight supply, but fears of demand destruction remained in the background.
Those gains followed the oil market's worst trading day in almost three months as markets were gripped by fears of an economic slowdown, and Citigroup said crude could fall as low as $65 this year in the event of a recession.
As of 2:00 p.m. EDT, U.S. crude futures were trading 0.4 percent higher at $99.92 a barrel after closing below $100 for the first time since late April, while the Brent contract was up 0.9 percent at $103.84 after falling 9.5 percent on Tuesday-the biggest daily decline since March.