European equities open up to growth, energy fears; Observed CPI data; UK retail shot


By Peter Nurse – European stock markets collapsed on Friday, starting the fourth quarter on a low note amid fears that rising inflation could prompt central banks to withdraw their stimulus measures as growth slows.

At 3:25 am ET (07:25 GMT), the DAX in Germany was trading down 1.1%, the CAC 40 in France fell 1% and the UK FTSE 100 fell 0.8%.

The losses followed weakness in Asia earlier Friday, with the Nikkei index in Japan falling more than 2%, while markets in Hong Kong and mainland China were closed, and on Wall Street from day to day. The next day, the Dow Jones Industrial Average blue chips fell further by more than 500 points, or 1.6%.

The disappointing news continued on Friday, as German retail sales rose 1.1% in August, a rebound from the revised 4.5% drop in the previous month but less than the previous month. 1.5% increase expected.

In corporate news, Daimler (OTC: DDAIF) stock fell 2.6% as shareholders vote on whether to separate its truck manufacturing division from its Mercedes-Benz luxury car operations. A similar move by Volkswagen (DE: VOWG_p), down 2.2% two years ago, has done little to unlock additional value in its Traton truck business.

UK retail stocks suffered more than most, as investors took into account the likely consumer spending blow from a tightening of fiscal policy as the government withdrew many of its backers during the recession. pandemic. AO World stock fell 17% after its biannual update showed sales growth was slowing, while fast fashion group Boohoo (LON: BOOH) fell 2.1% to a low of 18 months and rival ASOS (LON: ASOS) fell to a 16 month low. JD (NASDAQ: JD) Sports Fashion (LON: JD) stock fell 4.3%.

Global markets have been edgy by continued high inflation, as growth appears to be slowing and central banks seek to withdraw accommodative monetary policies.

With that in mind, investors will focus on releasing key inflation data later Friday and the European Central Bank’s likely response as the region’s economy recovers from the pandemic.

The Eurozone CPI for September is expected at 5 a.m. ET (9 a.m. GMT) and is expected to post an annual increase of 3.3%, rising from the 3.0% level in August. These figures will test the resolve of a European Central Bank still convinced that inflation will quickly fall below its medium-term target of 2%.

Crude prices edged down on Friday as traders prepared for next week’s meeting of major producers and the potential for additional production to ease current supply issues.

The Organization of the Petroleum Exporting Countries and its Russia-led allies, a group known as OPEC +, are due to meet on Monday and could increase production beyond the 400,000 barrels per day already agreed for November and December given the background of oil hovering near three – year highs.

As of 3:25 a.m. ET, U.S. crude futures were trading down 0.3% to $ 74.83 a barrel, while the Brent contract was down 0.2% to $ 78.12.

Additionally, gold futures fell 0.2% to $ 1,754.35 / oz, while EUR / USD traded up 0.1% to 1.1587.

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