European Stock Futures Weaken; U.K. Political Chaos, Recession Worries Weigh By

By Peter Nurse 

- European stock markets are skymarkets foreign exchange platformexpected to open lower Friday, as rising bond yields reinforced expectations of an economic slowdown while U.K. political turmoil continued.

At 02:00 ET (06:00 GMT), the contract in Germany traded 1.1% lower, in France dropped 0.9% and the contract in the U.K. fell 0.5%.

European equity markets are expected to follow the lead from the U.S. after the negative close on Wall Street Thursday and the losses in Asia overnight. 

This followed U.S. Treasury yields rising to 14-year highs as the prospect of further aggressive interest rate hikes from the , likely plunging the world’s dominant economy into recession, soured investor sentiment.

European bond yields have also climbed sharply higher Friday, including those associated with the benchmark as the political tumult in the U.K. continued with the resignation of Prime Minister after six chaotic weeks marred by policy shocks.

The country now faces an abbreviated leadership contest, with former finance minister Rishi Sunak the early favorite. However, even if he wins and retains Jeremy Hunt as chancellor for stability, the new PM will still have severe economic challenges to face.

slumped 1.4% on the month in September, down 6.9% on an annual basis, as consumers reined in their discretionary spending in the face of the cost of living crisis given double-digit and rising interest rates.

Market research firm showed on Friday that U.K. consumers remain close to the gloomiest on record.

In corporate news, (EPA:) said its quarterly rose to 9.8 billion euros ($9.57 billion), as price increases allowed the French car manufacturer to generate revenue growth despite a decrease in sales from the previous year.

Luxury eyewear maker EssilorLuxottica (EPA:) reported an 8% rise in third-quarter , noting a rebound in sales in the Asia-Pacific region.

Oil prices edged higher Friday, on course for small gains this week, boosted by signs of consistent consumption in the U.S., the world’s largest economy, and optimism about a possible rise in energy demand in China, the largest crude importer.

U.S. crude oil inventories fell surprisingly last week, suggesting demand in the world’s largest economy remained steady despite rising prices. Additionally, Bloomberg reported that Beijing is considering cutting the quarantine period for visitors to seven days from 10 days, potentially loosening the country’s tight COVID restrictions.

Crude has seen choppy trading of late, with the market caught between worries about a global economic slowdown and supply curbs from the globe’s top producers.

By 02:00 ET, traded 0.1% higher at $84.61 a barrel, while the contract rose 0.1% to $92.51. 

Additionally, fell 0.7% to $1,625.75/oz, while traded 0.1% lower at 0.9776.

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