European stock futures fall; Voting in Italy increases uncertainty

European stock futures fall;  Voting in Italy increases uncertainty

Written by Peter Norse – European stock markets are expected to open lower on Monday, weighed by a deteriorating economic outlook and political uncertainty.

At 02:00 ET (06:00 GMT), the contract in Germany was down 0.9%, in France it was down 0.8%, while the UK contract was trading largely flat.

European stocks were under pressure for most of the year as investors worried about the toxic combination of high inflation, strong monetary tightening, an escalating energy crisis and the economic consequences of the Russia-Ukraine war.

Dismal business data from the eurozone and the UK last week heightened fears of a regional recession, and investors will look to the September release later in the session for more clues to business sentiment in the eurozone’s largest economy.

Adding to the region’s troubles, Italy’s electoral victory late Sunday for a right-wing-led coalition is likely to give the country the most right-wing government since World War II.

Although Meloni, who is set to become Italy’s first female leader, has played down her party’s post-fascist roots, there will be a great deal of uncertainty about how she will attempt to deal with the mounting economic headwinds facing the third largest economy. in the euro area. Due to its huge debt mountain.

Global tension is also rising over the war in Ukraine, with Russia conducting widely criticized votes aimed at forcibly annexing territories it has occupied.

The UK stock market may outperform Monday after hitting a record low on Monday following last week’s unveiling of the country’s largest package of tax cuts in 50 years to support sluggish economic growth.

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The drop in the pound illustrates the market’s skepticism about the sustainability of such a move, given that the country faces a slowdown in growth and a double deficit. However, it could also help a number of the country’s giants that make a lot of their revenue abroad and so will boost their weak when brought back home.

Oil prices fell on Monday, retreating to levels not seen since early January, weighed down by a stronger US dollar and fears that slowing global economic activity could dampen demand for crude.

The US dollar, which measures the greenback against a basket of six other currencies, rose to a 20-year high on Monday, making all dollar-denominated commodities, including oil, more expensive for foreign buyers.

By 02:00 ET (06:00 GMT), futures were down 0.9% at $78.03 a barrel, while the contract was down 0.9% at $84.25. Both contracts fell about 5% on Friday, falling to their lowest level in eight months.

In addition, it was down 0.6% to $1,646.70 an ounce, while trading was down 0.5% at 0.9641.

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