European Stock Futures Higher; US Debt Talks and Easing Energy Prices Help By –

investing newStock Markets42 minutes ago (Oct 07, 2021 02:02AM ET)

European Stock Futures Higher; U.S. Debt Talks and Easing Energy Prices Help © Reuters.

By Peter Nurse – European stock markets are expected to open higher Thursday, continuing the week’s volatile trading with sentiment boosted by falling energy costs and signs of compromise in Washington over averting a U.S. default.

At 2 AM ET (0600 GMT), the contract in Germany traded 0.6% higher, in France climbed 1.3% and the contract in the U.K. rose 1.2%.

European markets are likely to benefit Thursday from the abrupt reversal on Wall Street late Wednesday, with the blue chip overturning a loss of over 400 points to close 100 points higher, as concerns about the lack of a debt ceiling deal eased.

This followed Senate Minority Leader offering a short-term suspension of the U.S. debt ceiling to avert a national default — which Treasury Secretary Janet Yellen has recently said would result in a financial crisis and recession — until a more permanent solution can be found before the end of the year.

Earlier in the day, a stronger than expected report on indicated that the economy still has enough momentum to allow the Federal Reserve to start reducing its bond purchases in November, as expected

The yield on benchmark has since fallen back to 1.54%, down from Wednesday’s three month high of 1.57%.

Also helping the tone in Europe Thursday has been the move lower in energy prices, with crude falling off multi-year highs after an unexpected rise in raised concerns over demand in the world’s largest consumer.

By 2 AM ET, futures traded 0.5% lower at $77.06 a barrel, having hit a seven-year high on Wednesday, while the contract was flat at $81.09, after posting a three-year high in the previous session.

Gas prices also fell from all-time highs, a day after Russian President said his country was ready to supply more to head off a growing energy crisis.

That said, there was some disappointing economic news Thursday, as slumped 4.0% on the month in August, a hefty drop from the 1.0% gain seen in July. This follows Wednesday’s sharp 7.7% fall in , and points to the difficulties Europe’s largest economy has been having with supply chain constraints.

Elsewhere, speeches from European Central Bank members Philip Lane and Frank Elderson are likely to be studied following talk that the central bank is studying a new bond-buying program to prevent any market turmoil when emergency purchases get phased out next year.

Additionally, rose 0.2% to $1,758.30/oz, while traded 0.1% lower at 1.1550.

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