Wednesday should be a bad day for European stock markets. Investors are still worried that the region will go into a recession because inflationary pressures are still high.
At 02:00 ET (06:00 GMT), the DAX futures contract in Germany was down 1%, the CAC 40 futures contract in France was down 0.6%, and the FTSE 100 futures contract in the U.K. was down 0.9%.
German industrial production fell 0.3% month-over-month in July, according to data released on Wednesday. This was a drop from the revised 0.8% growth the previous month, which showed that the outlook for Europe’s largest economy continued to get worse after Russia invaded Ukraine in February and caused a regional energy crisis.
Related: European stocks go up, and the likely return of Russian gas helps.
The GDP and employment numbers for the second quarter of the eurozone will be released Wednesday evening. Both are expected to show that the economy is getting worse.
These numbers come just one day before the next policy meeting of the European Central Bank. Most people expect the governing council to raise interest rates aggressively to try to stop inflation from getting out of control, even if it hurts growth in the region.
Asia-related news was also bad for my mood. China’s trade surplus dropped sharply in August compared to the previous month, with both exports and imports shrinking by a lot. This was because new COVID-related problems and a lack of energy made the economy less active.
In other news, Liz Truss, the new prime minister of the United Kingdom, promised a big package of help this week to deal with the country’s rising energy costs as she started her first day on the job.
She took over from Boris Johnson at a time when the country’s economy was in bad shape. On Thursday, she is expected to announce plans that could cost the government as much as 230 billion dollars to keep energy prices down over the next 18 months.
Oil prices went down on Wednesday, wiping out all of the week’s gains. COVID- 19 lockdowns in China added to worries about slowing global economic growth, which would hurt demand.
China’s crude oil imports fell 9.4% in August compared to the same month last year, according to data released on Wednesday. This is because the country’s strict COVID restrictions kept a number of cities locked down, which limited people’s movement and oil demand in the world’s top crude importer.
At the start of the week, the price of oil went up after the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, said they would cut production by a small 100,000 barrels per day in October.
Related: Futures on European stocks decline; German retail sales surprise positively.
By 2:00 ET, U.S. crude futures were down 1.9% to $85.20 a barrel, which was the lowest price since January 26. The Brent contract was down 1.7% to $91.25, which was the lowest price since February 18.
Also, gold futures went down 0.4% to $1,705.25/oz, and the EUR/USD pair went down 0.1% to 0.9891.
