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Title: European Stock Futures Edge Lower; Caution Ahead of Powell's Speech

Aug 26, 2022 02:05AM ET

By: AnalysisWatch

European stock markets are expected to open slightly lower on Friday, ahead of an expected speech by Federal Reserve Chairman Jerome Powell, which could provide information on the US central bank's plans to tighten monetary policy.

The DAX futures contract in Germany was down 0.1 percent at 2:05 a.m. EDT, the CAC 40 futures contract in France was down 0.2 percent, and the FTSE 100 futures contract in the United Kingdom was down 0.1 percent.

Investors are eagerly awaiting Powell's speech at the Jackson Hole symposium at 10 a.m. EDT for any information on how aggressively the Fed still plans to raise interest rates.

Policymakers have stressed in recent weeks how important it is for the Fed to rein in inflation, but recent data also point to a cooling U.S. economy, and they risk pushing the world's largest economy and a major engine of growth into recession.

These growth concerns are even more pronounced in Europe as the continent struggles to cope with the energy crisis as gas prices soar following Russia's incursion into Ukraine.

On Thursday, Germany's Ifo business climate index fell to its lowest level in more than two years, and on Friday, Germany's GfK consumer climate index painted a similarly gloomy picture.

GfK's outlook index fell to 36.5 points for September, well below the 31.8 points expected and representing a major drop from the downwardly revised 30.9 points for the previous month.

Also of interest will be the decision by UK energy regulator Ofgem to raise the cap on household energy bills to a record £3,549 ($4,189) from 1 October.

This amount is expected to rise further in January as the UK competes with other countries for limited gas supplies and represents a significant jump from last winter's cap of £1,277.

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