European Stocks Set for Muted Open

European equity markets were set to open little changed on Friday as investors remained cautious after global bond yields rebounded amid skepticism over the US government’s bond buyback plan. Oil prices also remained elevated as the US prepares sweeping new economic sanctions against Iran, keeping inflation risks in focus. In Europe, investors will assess UK retail sales and French business confidence data, along with manufacturing and services PMI reports from the Eurozone, Germany, France and the UK. In corporate news, Banca Monte dei Paschi di Siena SpA is seeking to acquire two separate banks in deals worth a combined €34 billion, as it moves to fend off a potential takeover by rival Intesa Sanpaolo SpA. In premarket trading, Euro Stoxx 50 and Stoxx 600 futures hovered around the flatline, with both benchmarks coming off at least five consecutive sessions of losses.

European stocks closed slightly lower on Thursday amid sharp losses for high-end retailers and lingering macroeconomic headwinds. The Euro STOXX 50 dropped 0.2% to 6,432 and the STOXX Europe 600 inched below the flatline to 651. Luxury companies led the declines amid pessimistic signs on demand for major consumers. Recent retail sales released by China, the world's top luxury consumer, rose less than expected in July. In the US, the outlook on discretionary spending was pressured by a rebound in Treasury yields, a weaker dollar, and increasing inflationary risks. LVMH and Adidas lost 3%, while Hermes fell 2%. Meanwhile, Airbus, Safran, and Rheinmetall dropped around 2% to set the pace for industrial giants. In turn, Intesa Sanpaolo added 0.4% after Banca MPS approved bids for BPM and Banca Generali to fend off the former's takeover attempt.

European stocks were little changed on Thursday as investors assessed developments in global bond markets and continued to monitor rising oil prices amid persistent Middle East tensions. The US Treasury’s decision to at least double the size of its longer-dated bond buybacks pushed Treasury yields sharply lower. Meanwhile, uncertainty surrounding the US-Iran standoff continued to weigh on markets as oil prices remained elevated. Among major stocks, ASML and L’Oréal advanced, while automotive shares were among the strongest performers, with BMW gaining 1.4%, Volkswagen 1% and Mercedes-Benz 0.8%. In contrast, Rheinmetall fell 1.5%, while SAP, BASF and Nokia declined around 1.3%-1.4%. LVMH and Linde also traded lower. Investors are also assessing German producer-price data, which showed inflation reaching its highest level in more than three years. Attention now turns to the ECB’s latest meeting accounts for clues on future monetary policy.