European stock futures lower; Fed, ECB minutes in focus

By Peter Nurse 

Investing.com – European stock markets are expected to open lower Monday as investors fret over the likelihood of future monetary tightening and the impact on future economic growth.

At 02:00 ET (07:00 GMT), the contract in Germany traded 0.3% lower, in France dropped 0.4% and the contract in the U.K. fell 0.3%.

Recent lower-than-expected U.S. and inflation prints had boosted global markets on hopes that the U.S. would pivot away from aggressive interest rate hikes.

Several Fed policymakers have sought to temper those expectations, claiming there is still work to do to tame inflation, but the data does point to prices having peaked.

The situation is different in Europe, as the annual reading of soared past 10% at the end of last month, up from 9.9% in September.

European Central Bank President said on Friday that interest rates will need to be lifted to levels that restrict economic expansion in order to combat inflation at those uncomfortable levels.

This suggests another increase at its December meeting, which would be its fourth successive hike. Since July, the ECB has ratcheted up by 200 basis points.

With this in mind, minutes from the meeting and the later this week will provide markets with more direction on the outlook for interest rates, while are also due later Monday.

In corporate news, Julius Baer (SIX:) said it was on track to reach its 2022 profitability targets, despite “challenging market” conditions taking a big bite out of its assets under management at the Swiss lender.

Anheuser Busch Inbev (EBR:) could also be in the spotlight after Friday’s late decision by FIFA authorities to ban the sale of alcohol, primarily its Budweiser brand, at the stadiums as the Qatar soccer World Cup got underway on Sunday. 

Oil prices fell to near two-month lows Monday, weighed by demand concerns from China as COVID concerns in the biggest crude importer in the world increased.

New COVID case numbers in China remained close to the highs seen in April, while the country saw its first Covid-related death in almost six months on Saturday and another two were reported on Sunday.

By 02:00 ET, futures traded 0.7% lower at $79.59 a barrel, while the contract fell 0.7% to $86.97. 

Both benchmarks closed Friday at their lowest since Sept. 27, with the U.S. contract down 10% and Brent 9% lower, the biggest weekly decline since August. 

Additionally, fell 0.4% to $1,747.30/oz, while traded 0.6% lower at 1.0258.

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