News Column

European Markets Indicate Cautious Open Ahead Of Policy Decisions

September 3, 2014

PARIS (Alliance News) - The European markets are poised for a cautious open on Thursday, ahead of rate decisions from the European Central Bank and the Bank of England.

The DAX futures are sliding 7.50 points, the CAC 40 futures are falling 6 points and the Swiss Market Index futures are losing 25 points. The FTSE 100 futures, however, are gaining 2 points.

On the economic front, Germany's manufacturing orders rebounded strongly in July, far exceeding economists' expectations, figures from the Federal Statistical Office showed. Factory orders increased a seasonally adjusted 4.6% from June, when they fell 2.7%, revised from a 3.2% decline. Economists had expected a 1.5% gain for July.

Meanwhile, unemployment in France increased marginally, as expected, in the second quarter, a report from statistical institute INSEE showed. The jobless rate, measured according to International Labour Organisation standards, edged up to 10.2% in the second quarter from 10.1% in the first quarter, in line with the consensus estimate.

At 7 am ET, the Bank of England will announce its monetary policy decision. The bank is expected to maintain its base rate at 0.5% and its total Asset Purchase Facility at 375 billion pounds.

The European Central Bank is due to announce its rate decision at 7:45 am ET. Notwithstanding the weakening of growth indicators and slowing down of inflation, the central bank is expected to maintain its deposit rate and refinancing rate at -0.1% and 0.15%, respectively.

The European markets closed higher on Wednesday, following news of ceasefire in Ukraine. The DAX climbed 1.3%, the CAC 40 rose about 1% and The FTSE 100 index advanced 0.65%. The Swiss Market index gathered 0.53%.

On the corporate front, the European Commission Wednesday imposed fines totalling 138.05 million euros on four firms including Infineon Technologies AG and Philips, after finding that the firms coordinated their market behavior for smart card chips in the European Economic Area, in breach of EU rules that prohibit cartels.

German engineering group Bilfinger SE Wednesday reduced its profit forecast for the year yet again.

Logitech said it has decided to restate certain prior financial statement due to an accounting misstatement for inventory valuation reserves for Logitech's discontinued Revue product.

French oilfield services provider Technip said it was awarded a contract to provide project management, as well as engineering, procurement and construction management services for a new industrial gas complex for Bharat Petroleum Corporation Limited - Kochi Refinery in Kochi, India.

UK-based construction group Balfour Beatty PLC. (BBY.L) Thursday announced the sale of its professional services division, Parsons Brinckerhoff, to WSP Global Inc. for a cash consideration of USD1.353 billion.

In Asia/Pacific, markets are trading mixed ahead of key policy decisions from central banks in Europe and the UK

The US futures indicate a cautious open on Wall Street. In the previous session, the major averages eventually closed mixed for the second consecutive day. The tech-heavy Nasdaq fell 0.6% and the S&P 500 edged down 0.1%, while the Dow crept up 0.1%.

Among commodities, crude for October delivery is losing USD0.70 to USD94.84 per barrel, while December gold is gaining USD1.5 to USD1271.8 a troy ounce.

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Source: Alliance News

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