London Stock Exchange
Toby Melville | Reuters
The pan-European Stoxx 600 was down 0.8% in early afternoon, with autos falling 3% to lead losses as most sectors and major bourses traded in negative territory. Oil and gas stocks bucked the trend to rise 0.8%.
Risk sentiment was dampened by hawkish signals from ECB policymakers, with Bundesbank President Joachim Nagel telling a German newspaper that the ECB must keep raising interest rates even as recession risks in Germany increase.
Minutes from the ECB̵[ads1]7;s latest policy meeting will be published on Thursday, while investors will keep a close eye on flash PMIs for the Eurozone due on Tuesday.
Asia-Pacific shares were mixed on Monday as caution prevailed, although Chinese markets rose after China’s central bank cut its benchmark lending rates.
U.S. stock futures fell in early premarket trading after the S&P 500 snapped a four-week winning streak on Friday, as Wall Street looked ahead to Fed Chairman Jerome Powell’s Friday comments on inflation at the central bank’s annual Jackson Hole economic symposium.
“We expect the market to approach the Fed’s Jackson Hole meeting in fear of a hawkish message that could lead to a sharp risk-off move. However, we think the message will be more nuanced, and possibly even reassuring,” said Steve Englander , Head of Global Currency Research and North America’s Macro Strategy at Standard Chartered.
“For the Fed, getting inflation down to targets is not negotiable. Chairman Powell will likely say that the Fed will raise interest rates as far as it takes, and for as long as it takes, to bring inflation down.”
There are no major corporate earnings or economic data coming out of Europe on Monday.