By Peter Nurse
Investing.com - European stock markets are expected to open lower Friday after weakness on Wall Street and Asia overnight, due to concerns of rising inflation, slowing growth and less accommodative monetary policies.
At 2:10 AM ET (0610 GMT), the DAX futures contract in Germany traded 0.6% lower, CAC 40 futures in France dropped 0.6% and the FTSE 100 futures contract in the U.K. fell 0.4%.
European investors have received a negative handover Friday, with the Nikkei index in Japan dropping more than 2%, while markets in Hong Kong and mainland China were closed. The blue chip Dow Jones Industrial Average fell more than 500 points, or 1.6%, on Thursday.
September was a difficult month for equity markets globally, with investors having to cope with a combination of slowing growth, China’s regulatory clampdown, concerns over central banks tapering, ongoing Covid cases, fading fiscal stimulus and supply chain bottlenecks.
The disappointing news continued Friday, as German retail sales rose 1.1% on the month in August, a rebound from the revised 4.5% drop the previous month but below the 1.5% increase expected.
However, the main focus will be the release of key inflation data as investors try to gauge the state of price pressures and the likely response from the European Central Bank as the region’s economy recovers from the pandemic.
The September Eurozone CPI is due at 5 AM ET (0900 GMT), and is expected to show an annual rise of 3.3%, climbing from the 3.0% level in August. The figures will test the resolve of a European Central Bank that is still convinced that inflation will quickly fall back below its medium-term target of 2%.
In corporate news, the German car sector is likely to be in focus Friday, with Daimler (OTC:DDAIF) shareholders voting on potentially spinning off its truck-making division from its Mercedes-Benz luxury car operations. A similar move by Volkswagen (DE:VOWG_p) two years ago has done little to unlock additional value in its truck business Traton (DE:8TRA).
Crude prices stabilized Friday as traders prepared for next week’s meeting of top producers and the potential for additional output to ease the current tight supply concerns.
The Organization of the Petroleum Exporting Countries and allies led by Russia, a group known as OPEC+, are scheduled to meet on Monday, and could boost production beyond the 400,000 barrels per day already agreed for November and December given the backdrop of oil hovering near three-year highs.
By 2:10 AM ET, U.S. crude futures traded 0.1% higher at $75.09 a barrel, while the Brent contract rose 0.1% to $78.40.
Additionally, gold futures fell 0.2% to $1,752.90/oz, while EUR/USD traded flat at 1.1580.