Money Flow & EU Premarket: Caution in European markets ahead of weekend elections

Stoxx 50 futures are posting slight gains in premarket trading, showing little interest in the overnight surge in Chinese tech stocks, led by Alibaba. U.S. futures are also trading with modest gains, recovering some of yesterday’s losses. The upcoming German elections on Sunday may be contributing to cautious sentiment in Europe at the end of the week, given the potential for a prolonged period of uncertainty as coalition negotiations could take time. The main risk is that the elections will result in yet another fragmented parliament and a government too weak to implement necessary reforms.

Today is PMI data day in Europe, where good news could likely be bad for stocks, considering the implications for monetary policy—markets were rattled by Schnabel’s hawkish comments on Wednesday. The Hang Seng Tech Index is up more than 5%, lifting the rest of the Asian markets, as Alibaba shares soar by as much as 14% following its earnings report. The Japanese yen is down 0.6% against the U.S. dollar after Bank of Japan Governor Ueda signaled readiness to curb rising bond yields. Earlier, the yen hit a new high for the year after inflation accelerated more than expected.