European Stock Futures Mixed; Central Bank Tightening Dominates
2022.06.17 09:20
By Peter Nurse
Investing.com – European stock markets are expected to open mixed Friday, struggling for direction following the previous session’s sharp losses on fears aggressive monetary policy tightening could lead to a global slowdown.
At 2 AM ET (0600 GMT), the DAX futures contract in Germany traded 0.6% higher, CAC 40 futures in France climbed 0.6%, while the FTSE 100 futures contract in the U.K. fell 0.4%.
The main European indices posted hefty losses on Thursday, with the DAX closing down 3.3%, the CAC 40 down 2.4%, and the FTSE 100 3.1% lower, in the wake of a series of global central banks tightening monetary policies to tame red-hot inflation, sparking worries of a significant economic downturn.
The U.S. Federal Reserve announced on Wednesday an interest rate hike of 75 basis points, its largest increase since 1994, the Swiss National Bank unexpectedly lifted rates by 50 basis points on Thursday, while the Bank of England on the same day raised its interest rates by 25 basis points, hiking for its fifth consecutive meeting.
The main outlier is the Bank of Japan, which stuck with its strategy of pinning 10-year yields near zero at its policy meeting earlier Friday. However, this has done little to ease worries that inflation and rate hikes are going to curb economic growth for years to come.
Attention Friday will turn to the latest release of Eurozone consumer prices for May, which is expected to be confirmed with growth of 0.8% on the month, up 8.1% on the year.
In corporate news, Santander (BME:SAN) is likely to be in the spotlight with Bloomberg reporting that the Spanish lender is set to appoint insider Hector Grisi as its chief executive officer, replacing long-time executive José Antonio Alvarez.
ArcelorMittal (NYSE:MT) could benefit from the news that workers at a Mexican plant have called off a strike after reaching an agreement with the world’s largest steelmaker over profit-sharing.
Oil prices inched lower Friday as aggressive monetary tightening raised fears of significant demand destruction.
Elsewhere, the U.S. imposed sanctions Thursday on a series of companies that help export Iran’s petrochemicals, a move aimed at pressuring Tehran to revive the 2015 Iran nuclear deal.
By 2 AM ET, U.S. crude futures traded 0.2% lower at $117.36 a barrel, while the Brent contract fell 0.1% to $119.66. Both benchmarks are on course for heading for the first weekly decline since April.
Additionally, gold futures fell 0.1% to $1,848.60/oz, while EUR/USD traded 0.2% lower at 1.0525.
