Stocks - Europe Largely Lower; China Trade Data Weighs

European stock markets are set to open largely lower Monday as weak trade data out of China, coupled with an illustration of the depth of the slowdown in Germany, outweighed the optimism generated by Friday’s shock gain in U.S. jobs.

At 2:10 AM ET (0610 GMT), the DAX futures contract in Germany traded 0.1% higher. France's CAC 40 futures were down 0.5%, while the FTSE 100 futures contract in the U.K. fell 0.1%.

Germany’s industrial production data slumped almost 18% in April, data released Monday showed, emphasizing the extent of the recession the euro area’s largest economy is facing even though lockdown restrictions are now being eased.

On top of this, the weekend saw disappointing trade data out of the globe’s second largest economy, China, a major trading partner with Europe. China's exports contracted in May by 3.3% from a year earlier, while imports tumbled 16.7%, the sharpest decline since January 2016.

This has tended to overshadow Friday’s surprise increase of 2.5 million in U.S. non-farm payrolls, against expectations of an 8 million drop. The jobless rate also fell to 13.3% in May from April’s 14.7%. This release had raised hopes of a quick economic recovery as governments around the world ease social restrictions to stem the virus. 

This all comes ahead of the Federal Reserve’s policy meeting on Wednesday, with the U.S. central bank having to decide whether to follow the European Central Bank in offering up another massive jolt of stimulus.

In corporate news, the region’s banking sector will be in focus after Intesa Sanpaolo (MI:ISP) said Monday that it has received authorization from the European Central Bank to acquire a controlling majority in Unione di Banche Italiane (MI:UBI).

The takeover will create Italy's largest bank.

Oil prices have pushed higher Monday, following the news over the weekend that the Organization of Petroleum Exporting Countries and its allies, including Russia, agreed to extend record oil production cuts until the end of July.

At 2:10 AM ET, U.S. crude futures traded 1% higher at $39.95 a barrel. The international benchmark Brent contract rose 1.3% to $42.87.

Elsewhere, gold futures rose 0.6% to $1,693.60/oz, while EUR/USD traded at 1.1284, flat on the day.

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