European markets set to follow global decline as inflation fears weigh

  • Global markets have been roiled by fears of high inflation, slowing growth and rising rates.
  • Investors will also have an eye on key U.S. inflation data later in the day.

LONDON — European markets are set to pull back on Friday, tracking U.S. and Asian counterparts as global stocks start the fourth quarter on the backfoot.

Britain's FTSE 100 is seen around 56 points lower at 7,030, Germany's DAX is set to fall by around 154 points to 15,107 and France's CAC 40 is expected to drop around 56 points to 6,464, according to IG data.

Shares in Asia-Pacific fell sharply during Friday's trade, with Japan's Nikkei 225 dropping more than 2.5% to lead losses. Mainland Chinese and Hong Kong markets were closed for public holidays.

Stateside, U.S. futures pointed to opening losses on Wall Street in early premarket trading after the S&P 500 suffered its worst month since March 2020.

Global markets have been roiled by fears of persistent high inflation, slowing growth and rising rates.

All eyes will be on inflation figures due later in the day.

Flash estimate of inflation for the euro zone is due at 10 a.m. London time. Meanwhile, in the U.S., core personal consumption expenditures price index, the Federal Reserve's preferred policy-guiding metric, is expected to rise 0.2% in August and 3.5% annually.

Euro zone finance ministers will meet Monday to discuss the economic fallout from soaring energy prices, amid concern that they could impact the bloc's recovery and disproportionately affect the poorest.

In Germany, the conservative CDU-CSU bloc is set to hold coalition talks with the liberal Free Democrats (FDP) on Sunday, Reuters reported Thursday citing CDU-CSU sources. The conservative bloc narrowly lost out to the center-left Social Democratic Party (SDP) in last weekend's federal election, but both sides are seeking alliances with other parties in the hopes of forming a coalition government.

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In corporate news, BMW lifted its annual profit forecast in an ad hoc statement on Thursday to between 9.5% and 10.5%, up from 7% to 9%. The German automaker said higher prices outweighed the effects of the global semiconductor shortage and other supply chain problems.

British pub chain JD Wetherspoon reports earnings on Friday, while Daimler and Credit Suisse both hold extraordinary general meetings.

On the data front, German retail sales figures are due before the bell on Friday, while Spanish, Italian, French and German manufacturing PMI readings are due later in the morning.

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