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European Shares Set To Fall As Inflation Worries Persist

european market 021219 12oct21 lt

European stocks may drift lower at open on Tuesday as a global energy crunch fueled inflation fears and caution set in ahead of the U.S. corporate earnings season.

JPMorgan reports earnings on Wednesday, followed by BofA, Morgan Stanley and Citigroup on Thursday, and Goldman on Friday.

Analysts expect companies to report slowing growth due to supply-chain snags and rising prices.

Asian markets fell broadly amid the Evergrande contagion worries after the company reportedly missed paying all of its offshore bondholders by Monday deadline.

In addition, rivals Modern Land and Sinic are attempting to delay bond payment deadlines in the latest sign of an escalating debt crisis.

The U.S. dollar hit an almost three-year high versus the yen as the prospect of accelerating inflation and tighter monetary policy lifted bond yields. Oil held above $80 a barrel in the run-up to the Northern Hemisphere winter.

In economic releases, the Office for National Statistics is scheduled to issue U.K. unemployment data later in the day. The jobless rate is forecast to fall to 4.5 percent in three months to August from 4.6 percent in three months to July.

Germany's ZEW economic confidence survey results are also due. The economic confidence index is seen at 24.0 in October versus 26.5 in September.

The U.S. economic calendar remains relatively quiet today, although a report on job openings may attract some attention.

U.S. stocks fell overnight as investors fretted over rising prices and signs of slowing growth, with Goldman Sachs cutting its U.S. GDP forecast for the third month in a row.

The Dow and the S&P 500 shed around 0.7 percent while the tech-heavy Nasdaq Composite slipped 0.6 percent.

European stocks ended mixed on Monday as investors digested hawkish comments from Bank of England officials and awaited cues from the earnings season.

The pan European Stoxx 600 ended flat with a positive bias. The German DAX edged down marginally, while France's CAC 40 index inched up 0.2 percent and the U.K.'s FTSE 100 added 0.7 percent.

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