European Stock Futures Weaken; Recessionary Fears Grow

By Peter Nurse 

Investing.com - European stock markets are expected to open lower Friday, following Wall Street south on renewed fears that aggressive monetary tightening will result in a global recession.

At 02:00 ET (06:00 GMT), the DAX futures contract in Germany traded 0.9% lower, CAC 40 futures in France dropped 0.6% and the FTSE 100 futures contract in the U.K. fell 0.4%.

European stocks have received a negative handover from Wall Street, with the main U.S. indices closing sharply lower. The tech-heavy Nasdaq Composite led the way, dropping 1.4%, the broad-based S&P 500 fell 1.1%, while the blue chip Dow Jones Industrial Average fell 0.6%, to its lowest close in two months.

Investors are bracing for another substantial interest rate hike by the Federal Reserve next week, in the wake of this week’s hot inflation report, which is likely to further depress economic activity in the world’s largest economy and main growth driver.

Attention in Europe will turn to the release of Eurozone CPI data for August, at 05:00 ET (09:00 GMT), which is expected to climb 0.5% on the month, up 9.1% on the year.

The European Central Bank hiked its key interest rates by a historic 75 basis points last week, and signaled more hikes ahead as the policymakers attempted to get on top of these soaring prices.   

Both the World Bank and the International Monetary Fund warned Thursday of an impending global economic slowdown, with Indermit Gill, the World Bank's chief economist, saying he was concerned about "generalized stagflation," a period of low growth and high inflation.

These concerns have overshadowed the release earlier Friday of better than expected Chinese industrial production and retail sales in August. 

By contrast, U.K. retail sales fell 1.6% on the month in August, down 5.4% on the year, according to data released Friday, as consumers reined in discretionary spending with energy and food prices soaring.

In corporate news, the energy sector is likely to be in the spotlight, with Germany placing the German subsidiary of Russian oil giant Rosneft under trusteeship on Friday, handing control of the PCK refinery in Schwedt to the federal regulator.

Germany is also close to taking a controlling stake in the struggling gas importer Uniper (ETR:UN01), potentially paving the way for a full nationalization of the firm.

Oil prices edged higher Friday, rebounding after the previous session’s hefty losses, but were headed for a third straight week of losses on fears that aggressive monetary tightening will hit global growth and thus fuel demand. 

The crude market has also been hit by a strong U.S. dollar in the wake of the hot U.S. inflation data, which makes oil more expensive for buyers using other currencies. 

By 02:00 ET (06:00 GMT), U.S. crude futures traded 0.2% higher at $85.30 a barrel, while the Brent contract rose 0.3% to $91.07. Both contracts tumbled around 4% on Thursday, and were set to lose nearly 2% for the week.

Additionally, gold futures fell 0.4% to $1,670.55/oz, while EUR/USD traded 0.2% lower at 0.9979.

Begin trading today! Create an account by completing our form

Privacy Notice

At One Financial Markets we are committed to safeguarding your privacy.

Please see our Privacy Policy for details about what information is collected from you and why it is collected. We do not sell your information or use it other than as described in the Policy.

Please note that it is in our legitimate business interest to send you certain marketing emails from time to time. However, if you would prefer not to receive these you can opt-out by ticking the box below.

Alternatively, you can use the unsubscribe link at the bottom of the Demo account confirmation email or any subsequent emails we send.

By completing the form and downloading the platform you agree with the use of your personal information as detailed in the Policy.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.4% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Back to top

Office network
  • London Office
    One Financial Markets 

    1 Finsbury Market
    London
    EC2A 2BN
    United Kingdom


    T:  + 44 ( 0 ) 203 857 2000
    E:  info@ofmarkets.com
  • Dubai Office
    One Financial Markets 
    OT19-39 Central Park Tower
    Dubai International Finance Centre
    Dubai
    United Arab Emirates
     
    T: + 00 971 44 22 888
    E:  info@ofmarkets.com
     

One Financial Markets is the trading name of Axi Financial Services (UK) Ltd, a company registered in England with company number 6050593. Axi Financial Services Ltd is authorised and regulated by the Financial Conduct Authority in the UK (under firm reference number 466201) and the Financial Sector Conduct Authority in South Africa (with FSP number 45784).

The information on this site is not directed at residents of the United States, Belgium, Poland or any particular country outside the UK and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

www.onefinancialmarkets.com is owned and operated by Axi Financial Services (UK) Ltd.

Award winning broker
We have been presented with a number of awards that recognise the quality of our service and dedication to our clients :

Best FSA Regulated Broker
Saudi Money Expo

Best Education Product
Saudi Money Expo

Best Broker - Online Trading
IAIR Awards

Best Institutional Broker
Saudi Money Expo

Best FX Services Broker
CN Forex

Top International
FX Broker 2015

Saudi Money Expo

Broker of the Year
Online Trading – Middle East

IAIR Awards

Best Forex
Customer Service 2018

JFEX Awards

We accept the following payment methods: