Fears that aggressive monetary policy tightening could cause a global recession are expected to make it hard for the European stock markets to find a clear direction when they open on Friday. Instead, the markets are expected to be mixed.
At 2 AM ET (0600 GMT), the DAX futures contract in Germany was up 0.6%, the CAC 40 futures contract in France was up 0.6%, and the FTSE 100 futures contract in the United Kingdom was down 0.4%.
The main European indices posted significant losses on Thursday, with the DAX closing down 3.3%, the CAC 40 closing down 2.4%, and the FTSE 100 closing down 3.1%. This was in response to a series of global central banks’ tightening monetary policies to tame red-hot inflation, which sparked fears of a significant economic downturn.
The U.S. Federal Reserve announced an interest rate hike of 75 basis points on Wednesday, its largest increase since 1994. The Swiss National Bank unexpectedly raised rates by 50 basis points on Thursday, and the Bank of England raised its rates by 25 basis points at its fifth consecutive meeting on the same day.
At its policy meeting on Friday morning, the Bank of Japan maintained its goal of holding 10-year rates close to zero. Nonetheless, this has done nothing to allay concerns that inflation and rate hikes will restrain economic development for years to come.
Attention This Friday will see the latest announcement of Eurozone consumer prices for May, which is anticipated to show a monthly increase of 0.8% and an annual increase of 8.1%.
Bloomberg reports that Santander (BME:SAN) is expected to pick insider Hector Grisi as its new chief executive officer, replacing long-time CEO José Antonio Alvarez. This is anticipated to garner significant attention in the corporate news sector.
ArcelorMittal (NYSE:MT) could gain from the news that workers at a Mexican factory have called off their strike after striking a profit-sharing agreement with the world’s largest steelmaker.
On Friday, oil prices went down a little bit because aggressive monetary tightening made people worry about a big drop in demand.
Aside from this, the United States imposed sanctions on Thursday against a number of companies that assist Iran in exporting petrochemicals, in an effort to pressure Tehran into reviving the 2015 Iran nuclear deal.
By 2 a.m. ET, US oil futures were down 0.2 percent at $117.36 per barrel, while Brent crude futures were down 0.1 percent at $119.66 per barrel.Both indices are projected to experience their first weekly fall since April.
In addition, gold futures declined 0.1% to $1,848.60/oz, while EUR/USD traded 0.2% down at 1.0525.
