global markets give way on Fed fears

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LONDON – European stocks are expected to open significantly lower on Monday after global markets became nervous on the tightening of the Fed’s tone last week.

According to the IG, the London-based FTSE opened 51 points lower at 6,955, the German DAX by 141 points at 15,290, the French CAC 40 by 34 points at 6,528 and the Italian FTSE MIB by 341 points lower at 24,722.

The projected decline for European markets follows similar moves elsewhere overnight. US stock futures slid early Monday morning after the Dow had its worst week since October, while stocks in the Asia-Pacific region fell in Monday morning trading, while Japan’s markets collapsed, where the Nikkei 225 fell 4%.

The moves come as investors continue to digest new economic forecasts from the Federal Reserve, fearing that rate hikes may come earlier than expected.

Continue reading: The Fed will continue to dominate the market in the coming week after the sell-off

Last Wednesday, the Fed raised its inflation expectations and forecast interest rate hikes in 2023. The President of the St. Louis Fed, Jim Bullard, said in CNBC’s “Squawk Box” on Friday that it was natural for the central bank to be a little “Hawkish” to tend and see higher interest rates from 2022.

Investors await public appearances from Fed members on Monday for further guidance on the central bank’s monetary policy outlook.

Bullard and Dallas Fed President Robert Kaplan will speak virtually on the panel of the Official Monetary and Financial Institutions Forum at 9:00 a.m. ET. New York (2 p.m. London time). Fed President John Williams is expected to comment on Monday afternoon at a Midsize Bank Coalition of America event.

In Europe there is no major income on Monday; Data releases include German producer prices and UK retail sales for May and current account data for the euro area for April.

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