European stock markets rose on Friday, ahead of Federal Reserve Chair Jerome Powell’s much-anticipated speech, which might provide insight into the US central bank’s monetary tightening intentions.
By 04:00 ET (08:00 GMT), the DAX in Germany was up 0.3%, the CAC 40 in France was up 0.3%, and the FTSE 100 in the United Kingdom was up 0.4%.
Investors are waiting for Powell’s address at the Jackson Hole symposium, which begins at 10:00 ET (14:00 GMT), to see how aggressively the Fed expects to hike interest rates.
Policymakers have recently underlined the importance of the Fed controlling inflation, but recent data has also pointed to a slowing U.S. economy, and they fear dragging the world’s largest economy, and key growth engine, into recession.
These growth concerns are amplified in Europe, which is grappling with an energy crisis as gas prices skyrocket in the aftermath of Russia’s invasion of Ukraine.
These fears are impacting on sentiment, with the forward-looking GfK German consumer climate index plummeting to-36.5 in September, a record low and a significant decline from the previously corrected-30.9.
Furthermore, the United Kingdom’s energy regulator, Ofgem, lifted the maximum on home energy bills to a record 3,549 pounds ($4,189) on October 1. That figure is projected to rise further in January as the United Kingdom competes with other countries for restricted gas supply, and it marks a considerable increase from the current ceiling of 1,971 pounds.
Earlier Friday, German Economy Minister Robert Habeck said he may reconsider the country’s consumer fee to assist pay supplier aid as gas prices rise, amid a backlash over corporate profits in the industry.
Oil prices increased on Friday, putting them on track to close the week with significant gains as global supply tightened further.
The idea of the Organization of Petroleum Exporting Countries, led by Saudi Arabia, decreasing output has improved confidence this week, outweighing the possibility of Iran returning to oil markets if a nuclear deal with the West is reached.
By 04:00 ET, US oil futures were 1.5% higher at $93.90 per barrel, while Brent futures were 1.4% higher at $100.71. Both benchmarks are expected to rise by roughly 3%.
Furthermore, gold futures dipped 0.4% to $1,764.60/oz, while the EUR/USD remained unchanged at 0.9974.
