European bourses are expected to continue weakness on Friday amidst caution ahead of several data releases and taking cognizance of the deep losses in Asian peers. Fed officials’ most recent hawkish comments, Omicron-spread etc. could also influence the market sentiment to be subdued.
The CAC Futures (January) is trading 1.33 percent lower. The FTSE 100 futures for March are trading 0.43 percent lower. The DAX Futures for March is trading 0.09 percent higher.
On Thursday, American stocks continued their decline with the Nasdaq-100 dropping 2.57 percent to close at 15,495.62 and the Dow Jones Industrial Average moving down 0.49 percent to end at 36,113.62.
On Thursday, European markets had traded weak amidst a lingering fear against the imminent interest rate tightening by Fed. U.K.’s FTSE 100 gained 0.16 percent, Germany’s DAX gained 0.13 percent, the pan European Stoxx 600 moderated 0.03 percent, Switzerland’s SMI shed 0.39 percent and France’s CAC 40 declined 0.50 percent.
Dollar Index, which measures the strength of the Dollar against a basket of six currencies has fallen further to 94.64, from 94.79 at the close on Wednesday. The EURUSD pair has increased 0.24 percent to 1.1481, while the GBPUSD pair has increased by 0.23 percent to 1.3736 in tandem with the fall in the Dollar.
Gold futures for February settlement are trading at $1826.50 per troy ounce, about 0.28 percent higher than the previous close of $1,821.40.
WTI Crude for February settlement is trading at $82.02, down 0.12 percent from the previous close whereas Brent Crude for March settlement is trading at $84.59, up 0.14 percent from the previous close.
American futures point to positive trends, with the Nasdaq 100 Futures and Dow Jones Futures currently rising 0.06 percent each over Thursday’s closing levels.
Asian markets are trading in deep negative territory in the backdrop of hawkish comments by Fed officials. South Korean Kospi has lost 1.46 percent; Japan’s Nikkei 225 has shed 1.38 percent; Australia’s S&P ASX 200 has declined 1.08 percent; Hong Kong’s Hang Seng is down 0.98 percent; China’s Shanghai Composite is down 0.48 percent; India’s Nifty 50 has corrected 0.40 percent; and New Zealand’s NZX 50 has lost 0.29 percent.
A host of data releases are awaited from the European region, most importantly, the Balance of Trade data for November from U.K and the 2021 GDP growth rate from Germany. U.K.’s trade deficit which was at 2.03 billion pounds in November is forecast to widen to 2.7 billion pounds in December. The German economy which contracted by 4.6 percent in 2020 is forecast to grow by 3 percent in 2021.
Other data points due for release from the U.K are the Goods Trade Balance, Industrial Production, Manufacturing production, GDP, Construction Output etc. for November as well as the NIESR monthly GDP tracker for December.
France awaits inflation readings for December as well as Budget Balance for November.
Euro Area’s Balance of Trade for November is also due for release on Friday. Also keenly watched would be the ECB President Christine Lagarde’s address on Friday, for the possible future direction of monetary policy.
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