RTTNews - The major European markets are poised to open slightly higher on Thursday, amid mixed cues from Wall Street and the murky outlook for the global recovery. Bargain hunting at lower levels on beaten down stocks might lend support as traders await key economic data related to retail sales in the UK later in the day.
In the U.S., mixed performance was witnessed Wednesday as traders digested the sweeping proposals of President Obama to revamp the financial sector.
A report released by the Labor Department on consumer prices revealed that the prices edged up 0.1% during May after coming in unchanged in April. However, the increase was less than economists' mean expectation of a 0.3% rise in consumer prices. Core consumer prices, which exclude food and energy prices, also edged up 0.1 percent in May following a 0.3 percent increase in April. The modest increase in core prices came in line with economist estimates.
In other news, the Federal Reserve continued its treasury buyback program Wednesday, completing its second quantitative easing move of the week. The New York Federal Reserve purchased $7.0 billion worth of securities with maturity dates ranging from May of 2016 to May of 2019.
President Obama laid out a sweeping agenda for regulatory reform in an effort to prevent a recurrence of the financial meltdown that sunk the U.S. economy into a recession. He proposed granting the Federal Reserve the authority to scrutinize firms that are large enough to pose a systemic risk to the financial markets. He also called for the creation of an oversight council of existing federal regulators to share information, identify gaps in regulation and tackle issues that don't fit neatly into an organizational chart. The President also called for the creation of a new agency dedicated to looking out for the interests of consumers in the financial markets.
While the Nasdaq finished higher by 11.88 points or 0.7% at 1,808, the Dow slid 7.49 points or 0.1% to 8,497 and the S&P 500 dropped by 1.26 points or 0.1% to 911.
Meanwhile, the European markets ended in negative territory for the fourth successive day on Wednesday dragged down by banks and energy stocks. While lower commodity prices dragged down the energy and mining stocks lower, bank stocks slipped after Standard & Poor's lowered its ratings and revised its outlooks on 22 U.S banks.
The FTSEurofirst 300 index of pan-European blue chips closed 1.93% lower at 846, while the narrower DJ Stoxx 50 index fell 1.65% to 2,098. The U.K.'s FTSE 100 index fell 1.16% to 4,278, while France's CAC 40 slipped 1.64% to 3,161 and Germany's DAX index dropped 1.86% to 4,800.
On the economic front, the Swiss central bank is set to announce its interest rate decision at 3.30 am ET. The central bank is widely expected to hold the rate at 0.25%.
At 4.00am ET, the Italian statistical office ISTAT is scheduled to release the external trade data. The trade balance for April is expected to show a deficit of EUR 250 million versus a surplus of EUR 82 million in March.
A slew of statistical reports related to retail sales and public sector net borrowings are due from the Office for National Statistics at 4.30 am ET.
U.K. retail sales for the month of May is forecast to rise 0.3% from the previous month, slower than the 0.9% growth seen in April. On a yearly basis, the decline is seen at 0.4%. The public sector net borrowings is expected to widen to GBP 19.3 billion from GBP 8.5 billion in April and cash requirement is forecast to increase to GBP 16 billion.
The Bank of England is slated to release a preliminary report on May M4 money supply. After rising 0.2% month-on-month in April, M4 money supply is now expected to grow 0.7% in May.
Crude oil price is trading above $71 a barrel. The greenback is showing strength against its European counterparts, while losing ground against the Chinese Yuan.
In corporate news, utility Suez Environment SA could be in focus after bagging a contract valued at EUR 120 million for waste collection in Brisbane, Australia.
Cement maker Heidelberg Cement might react to news that the company is close to finalizing agreements with more than 50 banks on financing of EUR 8.8 billion for its operations.
Ashtead Group Plc (AHT.L) might be in action after reporting a loss for the fourth quarter compared to profit in the same period last year, despite rise in total revenue.
HBL Power Systems might react to news that the company is considering sub-division of shares and recommendation of dividend for the financial year 2008-09.
Cadbury plc (CBY, CBRY.L) could see some upside after the management reported improved trading in April and May and confirmed its profit margin and revenue outlook for the full year.
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