European stock futures largely flat; Lagarde, U.S. debt ceiling news in focus

Investing.com – European stock markets are expected to open largely unchanged Thursday, as investors await further news on the potential for a deal to lift the U.S. debt ceiling deal as well as comments from ECB chief Christine Lagarde.

At 02:00 ET (06:00 GMT), the contract in Germany traded 0.1% lower, in France dropped 0.1% and the contract in the U.K. fell 0.1%.

Investors have been buoyed by the apparent determination of President Joe Biden and top U.S. congressional Republican Kevin McCarthy to reach an agreement soon, with Biden cutting short an Asia trip to return to talks on Sunday.

“It is possible to get a deal by the end of the week,” McCarthy told reporters on Wednesday. “It’s not that difficult to get to an agreement.”

The drama has been unfolding for weeks, since the government officially hit the ceiling of $31.4 trillion in January, with the Treasury warning that it could run out of cash by early June, potentially triggering a disastrous, first-ever default.

Back in Europe, the region’s data cupboard is largely bare today, and instead a lot of the day’s focus will be on a speech by ECB President .

The European Central Bank raised interest rates earlier this month, continuing its prolonged monetary tightening campaign against inflation, and investors will be looking for clues of future action.

“Inflation has been too high and for too long,” Lagarde said last week. “The ECB is on a journey to fight inflation, and the fight is not over, and it will only be over when we have sufficient confidence that we will reach the 2% target in the medium term.”

In the corporate sector, Deutsche Bank (ETR:) has agreed to pay $75 million to settle a lawsuit by women who say they were abused by the late financier Jeffrey Epstein, and accused the German bank of facilitating his sex trafficking.

Additionally, quarterly earnings are due from the likes of EasyJet (LON:), Burberry (LON:), BT Group (LON:), National Grid (LON:) and Premier Foods (LON:). 

Oil prices retreated Thursday, handing back some of the previous session’s solid gains as markets awaited more news on the potential lifting of the U.S. debt ceiling.

Crude prices rallied over 3% on Wednesday on optimism that a deal on raising the U.S. debt limit could shortly be reached, adding to the news of a drop in U.S. gasoline inventories due to demand surging to the highest levels since 2021.

By 02:00 ET, futures traded 0.5% lower at $72.44 a barrel, while the contract dropped 0.5% to $76.56. 

Additionally, fell 0.2% to $1,980.75/oz, while traded 0.1% lower at 1.0829.