European stocks fall Macroeconomic outlook looks bleak

European stocks fall Macroeconomic outlook looks bleak

Written by Peter Norse – European stock markets weakened on Friday, as investors digested a string of interest rate hikes in the region ahead of a financial update by the new British administration.

By 03:40 EST (07:40 GMT), trading in Germany was down 0.6%, in France it was down 0.4% and the UK was down 0.7%.

European stocks are headed for deep weekly losses as rising interest rates around the world threaten to sharply reduce economic growth, putting pressure on risk appetite.

It raised the benchmark interest rate by 50 basis points on Thursday, the seventh in a row, to end the period of negative interest rates, while the interest rate in Norway also rose by 50 basis points and indicated more hikes to come.

It also raised interest rates last week and followed suit on Wednesday, with both central banks raising 75 basis points.

HSBC warned Friday that the macroeconomic outlook in Europe is grim, as supply disruptions and the impact of the Russian war in Ukraine on energy and food prices continue to stifle growth, and force central banks to tighten monetary policy aggressively to rein in inflation. .

Investors will also focus on events in the UK, where new Finance Minister Kwasi Koarting is set to present his first financial update to Parliament, the so-called “mini-budget”. He is due to provide more details about his plans to support the country’s economy through a likely harsh winter.

There was some good economic news as the economic growth rate in the second quarter was raised to 1.5% from the previous 1.1% announced two months ago, but the manufacturing PMI and PMI data remained in contraction territory, as the region’s industrial base suffers from High energy costs.

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In corporate news, Credit Suisse (SIX:) (SIX :)) stock fell 7.8% on reports that the Swiss lender is once again approaching investors for fresh liquidity, as it attempts to reform its investment bank.

Oil prices fell on Friday, on course for a fourth consecutive weekly decline after a series of interest rate hikes around the world heightened fears of a global economic slowdown, hurting energy demand.

Russia’s decision to step up its invasion of Ukraine, and mobilize more troops to stem recent Ukrainian gains, helped stem the losses, but both contracts are on track for weekly losses of about 2% in the wake of the monetary tightening, led by the Federal Reserve. .

By 03:40 ET (07:40 GMT), futures were down 1.6% at $82.15 a barrel, while the contract was down 1.5% at $89.07.

In addition, it was down 0.4% at $1,674.90 an ounce, while trading was down 0.6% at 0.9778.

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