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Title: European Stock Futures Lower; UBS Disappoints With 2Q Earnings

Jul 26, 2022 01:59AM ET


European stock markets are expected to open with small losses. However, investors are cautious as the Federal Reserve begins its crucial policy-setting meeting.

Second-quarter results season gets underway in Europe this week, with UBS (SIX:UBSG) kicking off a round of results from major banks as investors watch for signs that a weaker economy, higher interest rates and the war in Ukraine are weighing on their trading and outlook.

The news so far is not positive, with the Swiss lender posting a 5% rise in second-quarter net profit, below expectations, as its investment bank's revenue fell 14% during what CEO Ralph Hamers called one of the "most difficult" quarters for investors in the past decade. He added that the second-half operating environment "remains uncertain."

The FOMC statement and the accompanying press conference by Fed Chairman Jerome Powell will also be closely watched amid fears that these sharp interest rate hikes will plunge the world's largest economy and main engine of global growth into recession.

Oil prices rose on Tuesday on growing concerns about Europe's energy supply after Russia announced a further reduction in the amount of natural gas being pumped into the region, which could encourage a shift to crude.

Gazprom, Russia's state-owned energy giant, said on Monday that supplies through the Nord Stream 1 pipeline to Germany would fall to just 20% of capacity, just days after restoring production to around 40% of capacity following the completion of scheduled maintenance work.

Data from the American Petroleum Institute on U.S. crude supply will take center stage later in the session.

By 02:00 AM ET, U.S. crude oil futures were trading 1.5% higher at $98.11 a barrel, while the Brent contract was up 1.6% at $101.72.

In addition, gold futures were up 0.1% at $1,720.65/oz, while EUR/USD was down at $1.0218.

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