European stock markets traded lower Monday, with investors fretting about rising Sino-U.S. geopolitical tensions and the global economic outlook despite a healthy rebound in German factory orders. The European Central Bank also hiked interest rates last Thursday, and its policymakers were keen to point out that more was needed to tame inflation. Also weighing on sentiment was the news that the U.S. shot down a suspected Chinese spy balloon over the weekend, a move that was condemned by Beijing which claimed the balloon was used for meteorological purposes and had accidentally drifted into U.S. airspace.
European stock markets are expected to open weaker Monday as investors digest the global economic outlook in the wake of strong U.S. payrolls data amid raised Sino-U.S. geopolitical tensions. At 02:00 ET (07:00 GMT), the DAX futures contract in Germany traded 0.5% lower, CAC 40 futures in France dropped 0.6%, while the FTSE 100 futures contract in the U.K. fell 0.4%. European stocks are likely to follow their Asian counterparts lower Monday after Friday’s strong U.S. jobs data provided more room for the Federal Reserve to continue tightening interest rates to combat inflation, raising fears that the largest economy in the world, and major growth driver, could fall into recession this year.
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