European Stock Futures Lower; French 1Q GDP Impresses

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By Peter Nurse – European stock markets are seen opening slightly lower Friday, ending the week on a cautious note following disappointing Chinese growth data and ahead of key European numbers and the continuing first-quarter earnings season. 

At 3:05 AM ET (0705 GMT), the contract in Germany traded 0.1% lower, in France were flat and the contract in the U.K. fell 0.2%. 

Global stock markets have been pushed to record levels of late by signs of a broad economic recovery, helped by vast amounts of fiscal stimulus and ultra easy monetary policies.

However, earlier Friday, China’s official fell to 51.1 in April from 51.9 in March, missing forecasts in April as supply bottlenecks and rising costs weighed on production.

That said, losses are likely to be limited after the broad-based closed at a record high on Wall Street Thursday, helped by strong earnings from some tech giants as well as U.S. first-quarter rising 6.4%, better than expectations for a 6.1% rise.

Back in Europe, the French also grew more than expected in the first quarter, climbing 0.4% from the fourth quarter, as consumer spending and business investment held up despite coronavirus curbs. 

More GDP and inflation data are due from the major European countries and the Eurozone as a whole.

The earnings season also continues, with BNP Paribas (OTC:) likely to be in the spotlight after the French banking giant reported a better than expected first-quarter profit, helped by lower provisions for pandemic-related bad loans and a rebound in its equity trading business.

Swiss Re (OTC:) swung to a profit in the first quarter as the strong underlying performance of all of the reinsurer’s businesses more than offset losses related to Covid-19 and large natural catastrophes, while French aerospace and defense company Safran (PA:) reiterated its full-year guidance despite posting a drop in first-quarter revenue.

Elsewhere, Nestle (SIX:) said it has bought vitamin and supplements maker The Bountiful Company for $5.75 billion.

Oil prices edged lower on profit taking Friday, but are still set to end the week with hefty gains as signs of economic recovery stoked optimism of a strong rebound in global demand this year.

Confidence is returning to the market, with the OPEC+ alliance raising its consumption estimates for this year and Goldman Sachs (NYSE:) predicting oil demand will post a record jump as vaccination rates increase. This is enabling the market to largely overlook the resurgence in Covid-19 in the Indian subcontinent.

futures traded 0.7% lower at $64.53 a barrel, while the contract fell 0.6% to $67.65. Both contracts are up around 4% this week, climbing to their highest levels in six weeks.

Elsewhere, rose 0.1% to $1,769.50/oz, while traded flat at 1.2119.

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