Here’s a look at how things are playing out at the open:
- Eurostoxx -0.2%
- Germany DAX -0.2%
- France CAC 40 -0.3%
- UK FTSE -0.1%
- Spain IBEX -0.4%
- Italy FTSE MIB -0.4%
What is driving stocks at the open today?
Oil prices and geopolitics remain the main drag from a macro perspective. Brent crude is pushing to $98.70 while WTI crude is rising back above $94 today amid continued tensions between the US and Iran.
And higher energy prices are pretty much just reinforcing inflation concerns, as markets prepare for Thursday’s ECB decision – where a 25 bps rate hike is widely expected.
Higher bond yields are also a key consideration, with 10-year yields in Germany keeping at around 3.38% – around its highest levels since 2011.
Looking over to the other side, US futures are also reflecting a more cautious mood with S&P 500 futures down 0.2% and Dow futures down 0.6%. Tech shares are somewhat holding up, with Nasdaq futures seen just a touch higher by 0.1%.
Wall Street will return to action today after the long weekend, continuing from the strong US payrolls on Friday – which served to reinforce expectations that the Fed could hike rates again this month.
Overall, there is no major panic selling in Europe for the time being. However, a combination of higher oil prices, higher yields, ECB/Fed tightening risks, and continued tensions in the Middle East is keeping buyers defensive.
This article was written by Justin Low at investinglive.com.