Monday was a cautious start to the week for European stock markets, as investors worried about the outlook for global economic growth in the face of rising geopolitical tensions.
By 3:40 a.m. ET (07:40 GMT), the DAX in Germany was down 0.6%, the CAC 40 in France was down 0.8%, and the FTSE 100 in the UK was down 0.4%.
China’s April retail sales fell 11.1 percent on the year, which was almost twice as bad as expected, and industrial output fell 2.9 percent instead of the small increase that was expected. This shows how badly COVID lockdowns are hurting the world’s second-largest economy, which is the world’s second-largest economy.
Investors also keep a close eye on geopolitical events. This is because Finland and Sweden are getting closer to applying to join NATO. This would end the two Nordic countries’ years of neutrality. After Russia invaded Ukraine, they were forced to rethink their positions, and this would be the end of those years.
The alliance’s border with Russia would be much longer if Sweden and Finland joined. This will irritate Russia, which has repeatedly warned Sweden and Finland of possible consequences.
Later in the session, the European Union will release its economic forecasts. The market will be watching to see how the war in Ukraine and rising inflation affect growth expectations. In February, it was thought that the EU economy would grow by 4% in 2022 and by 2.8% in 2023.
In the business world, Ryanair’s (IR: RYA) stock went up 2.4% after the Irish airline said it was likely to turn a profit this year, even though it had lost 369 million euros ($355 million) in the first three months of the year.
Avtovaz dropped 0.6% after Renault (EPA:RENA) said it would sell its majority stake in the Russian car company to a Russian science institute. The stake could be bought back by Renault in six years.
Monday, oil prices went down because there were signs that Chinese demand was going down, but they stayed high because the European Union was getting ready to ban imports of Russian crude, which would shake up global supply even more.
China, which imports the most oil in the world, processed 11% less crude in April than it did a year earlier, according to data released early Monday. As a result of widespread COVID-19 lockdowns, the amount of oil that went through the refineries every day fell to its lowest level since March 2020.
By 3:40 a.m. ET, U.S. crude futures were down 0.8% to $107.80 per barrel, and the Brent contract was down 1.1% to $110.35.
But both benchmarks rose sharply on Friday, and the WTI contract recently hit its highest level since March 28. Even though there are worries about supply in eastern Europe, the European Union is still expected to agree to a phased embargo on Russian oil this month.
Gold futures also went down by 0.6% to $1,798.29/oz, while EUR/USD went up by 0.1% to 1.0418.
