European stocks set to follow global markets lower

by Jonathan Adams
FTSE

FTSE is expected to open 51 points down at 6,955, Germany’s DAX 141 points lower at 15,290, France’s CAC 40 34 points lower at 6,528 and Italy’s FTSE MIB down 341 points at 24,722

Stocks in Europe are expected to open sharply lower on Monday after hawkish stance by the U.S. Federal Reserve last week jolted the markets.

London’s FTSE is expected to open 51 points down at 6,955, Germany’s DAX 141 points lower at 15,290, France’s CAC 40 34 points lower at 6,528 and Italy’s FTSE MIB down 341 points at 24,722, according to IG.

The decline forecast for European markets follows similar moves elsewhere overnight. U.S. stock futures dropped early Monday morning after the Dow posted its worst week since October, while shares in Asia-Pacific declined in Monday morning trade with the Nikkei 225 plunging 4%.

The moves come amid new economic projections from the U.S. Fed and concern that rate hikes could come sooner than expected.

The Fed raised its inflation expectations and forecast rate hikes in 2023 last Wednesday. St. Louis Fed President Jim Bullard said Friday on CNBC’s “Squawk Box” that it was natural for the central bank to tilt a little more “hawkish” and saw higher interest rates as soon as 2022.

Investors wait for any further clues on the central bank’s monetary policy outlook as Fed members are set to public appearances on Monday.

Bullard and Dallas Fed President Robert Kaplan are set to speak virtually on the Official Monetary and Financial Institutions Forum panel at 2 p.m. London time. U.S. Fed President John Williams is expected to deliver remarks at a Midsize Bank Coalition of America event Monday afternoon.

There are no major earnings in Europe on Monday; data releases include German producer prices and U.K. retail sales for May and euro zone current account data for April.



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