European Shares Set For Sluggish Start As IMF Cuts Asia’s Growth Forecasts

European stocks are seen opening a tad lower on Friday after the International Monetary Fund (IMF) cut Asia’s growth forecast to 4.0 percent this year and 4.3 percent next year, down 0.9 percent points and 0.8 points from April, respectively citing a number of headwinds.

Weak tech earnings may also weigh, with Amazon offering a gloomy view of its financial future, Apple signaling slower growth ahead and Intel announcing lower-than-expected earnings guidance for the full fiscal.

Asian markets were broadly lower while the yen fluctuated after the Bank of Japan kept its ultra-low interest rates.

Elsewhere, China widened its COVID-19 curbs as the country reported a third straight day of more than 1,000 cases.

Oil prices fell in Asian trade but headed for a weekly gain, supported by tightness in petroleum product markets and robust U.S. exports.

Gold was set for its second weekly climb on the back of a weaker dollar and falling U.S. Treasury yields, heading into next week’s FOMC meeting.

In economic releases, flash quarterly national accounts and inflation figures are due from Germany, France and Spain later today, headlining a hectic day for the European economic news.

The European Commission is set to release euro area economic sentiment survey results. Economists expect the economic confidence index to fall to 92.5 in October from 93.7 in September.

Across the Atlantic, reports on employment costs, consumer sentiment and pending home sales are due.

A report on personal income and spending is likely to attract attention, as it includes a reading on inflation said to be preferred by the Federal Reserve.

U.S. stocks ended mixed overnight and bond yields dipped, as GDP figures surprised to the upside but also offered some evidence of a healthy slowdown that could have a positive impact on fighting inflation.

The Dow rose 0.6 percent to extend gains for the fifth straight session and reach its highest closing level in well over a month, while the tech-heavy Nasdaq Composite fell 1.6 percent after Meta’s quarterly miss and the S&P 500 shed 0.6 percent.

Data showed the U.S. economy grew 2.6 percent in the third quarter following two straight quarters of contractions.

European stocks recouped losses to end mixed on Thursday after the European Central Bank raised interest rates by 75 basis points, as widely expected, and hinted at a slower pace of future increases amid mounting concerns about economic growth.

The pan European STOXX 600 ended flat with a negative bias. The German DAX inched up 0.1 percent and the U.K.’s FTSE 100 added 0.3 percent while France’s CAC 40 index dropped half a percent.

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