Title: European Stock Futures Mixed; Central Bank Tightening Dominates

Jun 17, 2022 01:51AM ET

By: AnalysisWatch

European stock markets are expected to open mixed on Friday, struggling for direction after sharp losses in the previous session on concerns that aggressive monetary tightening could lead to a slowdown in the global economy.

At 2:00 p.m. EDT, the DAX futures contract in Germany was trading 0.6% higher; the CAC 40 futures contract in France was up 0.6%; and the FTSE 100 futures contract in the U.K. was down 0.4%.

Major European indices posted big losses on Thursday, with the DAX closing down 3.3%, the CAC 40 down 2.4% and the FTSE 100 down 3.1%, as a result of a series of global central banks tightening monetary policy to tame soaring inflation, sparking fears of a significant economic downturn.

On Wednesday, the U.S. Federal Reserve announced a 75 basis point interest rate hike, its largest increase since 1994. On Thursday, the Swiss National Bank unexpectedly raised interest rates by 50 basis points, and on the same day, the Bank of England raised interest rates by 25 basis points, increasing them for the fifth consecutive meeting.

Attention on Friday will turn to the latest release of Eurozone consumer prices for May, which is expected to be confirmed with a 0.8% month-on-month and an 8.1% year-on-year rise.

Oil prices fell on Friday as aggressive monetary tightening raised concerns about a significant reduction in demand.

On Thursday, the US imposed sanctions on a number of companies that support Iranian petrochemical exports, a move aimed at pressuring Tehran to revive the 2015 nuclear agreement.

As of 2:00 p.m. EDT, US crude futures were 0.2 percent lower at $117.36 per barrel, while Brent futures were 0.1 percent lower at $119.66. Both benchmarks are headed for their first weekly decline since April.

In addition, gold futures fell 0.1% to USD1,848.60 per troy ounce, while EUR/USD traded 0.2% lower to 1.0525.