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  • Writer's pictureanalysiswatch

Title: European Stocks Lower; More Russian Sanctions, Aggressive Fed Weigh

Apr 06, 2022 03:37AM ET

By: AnalysisWatch

European stock markets traded lower on Wednesday, weakened by the likely imposition of new Western sanctions on Russia and fears of aggressive monetary tightening by the US Federal Reserve.

By 11:40 PM ET, Germany's DAX was trading 0.5% lower, France's CAC 40 was down 0.5%, and Britain's FTSE 100 was down 0.1%.

The United States and Europe are set to announce new sanctions later Wednesday to punish Moscow for alleged atrocities in Ukraine, which Ukrainian President Volodymyr Zelensky called "war crimes" in a speech to the UN Security Council.

The European Commission has already proposed new sanctions, including a ban on imports of Russian coal and a halt to trade worth nearly 20 billion euros ($22 billion), and the White House said late on Tuesday night that its new measures would target Russian banks and officials and ban investment in Russia.

Russia's invasion of Ukraine and sanctions already imposed by the West as punishment have roiled markets, causing commodity prices to soar and sparking fears of a sharp slowdown in growth this year.

German factory orders fell 2.2% month-on-month in February in the wake of Russia's invasion of Ukraine, the first decline in four months and underscoring fears of weaker growth in Europe's largest economy.

European markets were also dragged by negative oversold from Asia and Wall Street after comments from Fed Governor Lael Brainard raised expectations of an aggressive interest rate hike by the US central bank, which was backed by hawkish comments from Fed Governor Lael Brainard, who is usually seen as one of the more dovish members of central bank policy.

Later on Wednesday, attention will thus focus on the release of the minutes of the Fed's latest meeting, with investors looking for clues on the likelihood of a 50 basis point rate hike at the US central bank's next meeting in May.

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