European Shares Seen Tad Higher At Open As Fed Tightening Fears Ease

stockmarkets dec12 20jan23 lt

European stocks may open a tad higher on Friday after suffering heavy losses in the previous session on recession worries.

Fed tightening fears eased somewhat after Federal Reserve Bank of New York President John Williams along with a number of other Fed officials expressed support for a downshift in the pace of rate rises.

Fed Governor Lael Brainard and Susan Collins as well as President of the Boston Fed signaled on Thursday that the U.S. central bank may reduce the degree of its interest-rate increases in the near term.

Asian markets were seeing modest gains while the dollar struggled for direction and headed for a second consecutive weekly decline on expectations that the Fed might end its tightening cycle after a 25-basis point hike at each of its next two policy meetings.

Gold dipped slightly but hovered near a nine-month high as recession worries mount. Oil prices were marginally higher and headed for a second weekly advance on optimism over stronger Chinese demand.

U.S. stock futures were rising after a strong earnings report from Netflix. The streaming giant said it ended last year with more than 230 million global subscribers, beating analysts' expectations.

U.S. stocks fell for a third straight session overnight, with recession worries and political brinkmanship around raising the debt ceiling denting sentiment.

While the latest housing data provided further evidence of deceleration in the economy, new claims for unemployment benefits unexpectedly fell last week, adding to concerns that the Fed could overtighten policy.

The Dow and the S&P 500 both shed around 0.8 percent, while the tech-heavy Nasdaq Composite lost 1 percent.

European stocks suffered their worst single-day sell-off of the year on Thursday as ECB President Christine Lagarde and fellow policymaker Klaas Knot signaled that interest rates have to rise further to rein in inflation.

The pan European STOXX 600 fell 1.6 percent. The German DAX tumbled 1.7 percent, France's CAC 40 index plunged 1.9 percent and the U.K.'s FTSE 100 declined 1.1 percent.

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