European stocks look set to open on a tepid note Friday after Wall Street stocks slumped overnight, erasing a rally from a day earlier, in the face of inflation and growth concerns.
As the yield curve steepens, there are fears that the Federal Reserve is not doing enough to cool inflation.
Investors now await the monthly U.S. jobs data as well as comments by several Fed officials for more clues about the economic outlook.
Economists expect U.S. employment to jump by 391,000 jobs in April after an increase of 431,000 jobs in March. The unemployment rate is expected to edge down to 3.5 percent from 3.6 percent.
Asian markets followed Wall Street lower as investors pondered the consequences of the so-called ‘dovish hike’ from the Fed.
Russia’s war on Ukraine, high oil prices and China’s virus lockdowns also added to investor unease.
The dollar index was on track for its fifth consecutive week of gains and gold traded flat to slightly lower, while oil steadied near $110 a barrel after OPEC and its allies stuck to a small, planned increase in oil production.
U.S. stocks pulled back sharply overnight, as investors assesed the policy impacts of the Fed’s tightening moves on consumer demand and the broader economy.
The tech-heavy Nasdaq Composite plunged as much as 5 percent to its lowest closing level in well over a year as the yield on the benchmark ten-year note soared to its highest levels in well over three years. The Dow lost 3.1 percent and the S&P 500 shed 3.6 percent.
European stocks closed mostly lower on Thursday amid concerns about higher inflationary pressure, with the Bank of England warning of recession risks.
The pan European Stoxx 600 declined 0.7 percent. The German DAX dropped half a percent and France’s CAC 40 index slid 0.4 percent while the U.K.’s FTSE 100 inched up 0.1 percent, supported by a slump in sterling.
Market Analysis
European Shares Set To Fall On Fed Policy Jitters
2022-05-06 05:34:39
