Tile: European stocks set for worst week since November on hawkish Fed comments

Jan 14, 2022 07:31AM ET

By: AnalysisWatch

European stocks tumbled on Friday, with the STOXX 600 suffering its biggest weekly loss since November, and Wall Street futures pointed to a mixed opening in the United States as investors' expectations of a first US interest rate hike in March firmed.

Asian stocks fell after Fed Governor Lael Brainard became the latest and most senior US central banker to suggest that interest rates will be raised in March.

Other Fed officials have also indicated a willingness to raise rates after US consumer prices rose 7% year-on-year this week.

The risk-averse bias continued in European trading, with the STOXX 600 down 0.6% at 1151 GMT after losing 0.7% overall this week.

Germany's DAX and France's CAC 40 also fell 0.6%, while Britain's FTSE 100 lost just 0.1%. Technology stocks posted their second consecutive weekly decline as investors switched from growth to value stocks.

The MSCI World Equity Index, which tracks stocks from 50 countries, lost 0.3%.

Wall Street was expected to open mixed, with S & P 500 futures slightly higher but Nasdaq futures lower.

Paillat, who expects at least four Fed rate hikes this year, said it was "pretty much a done deal" that the tightening cycle would begin in March.

The dollar fell for a fourth straight day, hitting a two-month low, as investors took profits on long dollar bets. At 1156 GMT, the dollar index was at 94.827, on track for a weekly decline of 1%-the biggest since May last year.

The euro was unchanged at $1.1454.