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Title: European Stock Futures Lower; Hefty ECB Hike Casts Shadow

Jul 22, 2022 01:48AM ET

By: AnalysisWatch

European stock markets are expected to open lower on Friday as investors weigh a bigger-than-expected interest rate hike by the European Central Bank ahead of the release of new growth data.

At 02:00 GMT, the DAX futures contract in Germany was trading 0.3% lower; the CAC 40 futures contract in France was down 0.6%; and the FTSE 100 futures contract in the UK was down 0.4%.

The European Central Bank raised interest rates by 50 basis points on Thursday, its first increase in 11 years, ending a policy of negative interest rates implemented since 2014.

The increase was bigger than the 25 basis point rise ECB President Christine Lagarde targeted at the central bank's June meeting, suggesting policymakers have become very concerned about inflation, with the Eurozone’s consumer price index now at a record 8.6 percent a year, even at the expense of growth in the region.

Later in the session, new PMI survey data will be released for the Eurozone, which will provide insight into how companies in the region are coping with the current economic environment.

The key PMI index for Germany's manufacturing sector is expected to fall to 50.6 points in July from 52.0 points in the previous month, hardly staying in expansion territory.

UK retail sales fell by 0.1% month-on-month in June, slightly better than expected but still representing an annual decline of 5.8% as UK consumers curbed their discretionary spending amid a cost of living crisis.

Oil prices rose on Friday as traders saw value after the recent sell-off due to weakened demand in the United States, the world's biggest consumer of crude.

Data released earlier this week showed that US gasoline demand fell nearly 8% year on year during the peak of the summer driving season, weighing on the WTI contract.

As of 02:00 GMT, US crude futures were trading 1% higher at $97.28 a barrel, while the Brent contract was up 1% at $104.92.

Furthermore, gold futures traded unchanged at USD1,713.40/oz, while EUR/USD was 0.4% lower at 1.0190.

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