Following gains in the US and Asia, European stocks edged higher early on Thursday, as investors shrugged off worries about rising coronavirus cases, focusing on upbeat corporate earnings and economic recovery. Besides, the benchmark U.S. 10-year yield slipped to a five-week low after dropping below its 50-day moving average for the first time since November.
In individual stocks, Nestle rose over 3% after reporting its strongest quarterly sales growth in 10 years, with organic sales rising 7.7% in the first quarter. Credit Suisse, meanwhile, reported a net loss of $275 million as it digests the impact of the Archegos hedge fund scandal. The lender’s shares fell 5.6% in early trade. Meanwhile, Volvo climbed 3.5%, as the company raised its construction equipment guidance and reported a stronger-than-forecast first-quarter operating profit.
Against this backdrop, the FTSE 100 in London adds 0.18% to 6,908, Italy’s FTSE MIB gains 0.53% to 24,290, France’s CAC 40 is up by 0.89% to 6,265, while the German DAX 30 adds 0.53% to 15,276. US stock index futures were little changed ahead of the opening bell on Wall Street.
In currencies, the euro was flat against the dollar before the ECB meeting, with no changes expected to the central bank’s plans to accelerate asset purchases until June to rekindle growth. The EURUSD pair remains capped by the 100-DMA that arrives around 1.2055 today. As long as the prices stay below this moving average, upside risks are limited. On the downside, the immediate support is now expected at 1.2000. US jobless claims could also affect euro dynamics through the greenback later today.
In commodities, Brent crude has been retreating from recent peaks, flirting with the 20-DMA ($64.45), a break below which could bring more selling pressure in the short term. The Energy Information Administration reported that U.S. crude inventories rose by 600,000 barrels for the week ended April 16 following declines in each of the previous three weeks. Gasoline supply was up by 100,000 barrels, while distillate stockpiles fell by 1.1 million barrels for the week. the market was also pressured by a resurgence of coronavirus infections in India and Japan.
Nathan Lambert, Head of Global FX Analytical Department