European shares may come under heavy selling pressure on Friday, as investors fret about the impact of prolonged high interest rates on growth and the potential fallout from the implosions of Silicon Valley Bank and Silvergate Capital.
All eyes remain on the U.S. monthly jobs report due out later in the day, which could significantly impact the outlook for interest rates.
Economists expect employment to jump by 203,000 jobs in February after an increase of 517,000 jobs in January. The unemployment rate is expected to hold at 3.4 percent.
Next week’s consumer price inflation report is another key trigger for markets.
Closer home, monthly gross domestic product, industrial production and foreign trade data from the U.K. and consumer price inflation figures from Germany are due later in the day.
Asian markets were deep in the red as risk aversion deepened further in the wake of Silvergate’s troubles.
The Japanese yen weakened after the Bank of Japan kept stimulus settings steady in Governor Haruhiko Kuroda’s final policy meeting before retirement.
Gold prices were unchanged while oil extended declines for a fourth day and headed for its worst weekly drop since February on concerns about the global growth outlook.
U.S. stocks tumbled overnight as Silicon Valley Bank’s surprise decision to sell much of its bond portfolio at a loss prompted concerns about the value of U.S. banks’ bond portfolios.
The Dow fell 1.7 percent to its lowest closing level in four months while the tech-heavy Nasdaq Composite lost 2.1 percent and the S&P 500 shed 1.9 percent.
European stocks closed slightly lower on Thursday as weaker-than-expected data from China pointed to a sluggish economic recovery in the country.
The pan European STOXX 600 eased 0.2 percent. The German DAX ended flat with a positive bias, while France’s CAC 40 index slipped 0.1 percent and the U.K.’s FTSE 100 dropped 0.6 percent.
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