European Stock Futures Higher; UN to Discuss Ukraine Situation

© Reuters.

By Peter Nurse 

AiVIF.com - European stock markets are expected to open higher Monday, ending a difficult month on a positive note with investors keeping a wary eye on political developments between Russia and Ukraine.

At 2 AM ET (0700 GMT), the DAX futures contract in Germany traded 0.7% higher, CAC 40 futures in France climbed 0.5% and the FTSE 100 futures contract in the U.K. rose 0.2%.

Global stock markets have been hit hard in January, with the DAX, for example,  down over 3.5% as investors worried about rate hikes from the Federal Reserve to combat soaring inflation. 

There is a more positive tone Monday, but it’s debatable how long this will last as investors focus on a meeting of the UN Security Council to discuss Russia's troop build-up on the border with Ukraine. 

Western countries are currently preparing sanctions to levy on Russia should it invade its former Soviet-bloc neighbor, something Britain called “highly likely” over the weekend. Such a move could have severe repercussions for Europe’s energy supplies if Russia decides to limit its natural gas output to the region. 

This turmoil has helped oil prices climb to near seven-year peaks, ahead of a meeting of a group of top producers to discuss output levels.

The Organization of the Petroleum Exporting Countries and allies led by Russia, a group known as OPEC+, is scheduled to meet on Wednesday, and is expected to stick with its plan to increase output in a cautious manner in March.

U.S. crude futures traded 1.2% higher at $87.86 a barrel, while the Brent contract rose 1.1% to $89.52. The benchmarks recorded their highest levels since October 2014 on Friday, and their sixth straight weekly gain. 

In corporate news, Ryanair (LON:RYA) is likely to be in focus Monday after Europe’s largest airline by passenger numbers reported a loss of 96 million euros ($107 million) for the final three months of 2021 and warned the outlook remained “highly uncertain”.

Dutch telecom company KPN (AS:KPN) reported a rise in core profit of 4% in the fourth quarter, as revenues from mobile services to consumers and companies grew.

The economic data slate centers around the release of preliminary fourth-quarter gross domestic product data for the Eurozone, which is expected to rise 0.3% on the quarter, a gain of 4.7% on the year.

Data out on Sunday showed China's factory activity slowed in January as a resurgence of Covid-19 cases and the associated lockdowns hit production and demand.

Additionally, gold futures rose 0.1% to $1,787.20/oz, while EUR/USD traded 0.2% higher at 1.1166.