global markets down following Fed fears


LONDON – European stocks are expected to open sharply lower on Monday, following nervousness in global markets following a more hawkish tone from the US Federal Reserve last week.

The London FTSE would open 51 points down 6,955, the German DAX down 141 points to 15,290, the French CAC 40 down 34 points to 6,528 and the Italian FTSE MIB 341 points down to 24,722, according to IG.

The expected decline for European markets follows similar moves elsewhere overnight. U.S. equity futures slipped early Monday morning after the Dow Jones recorded its worst week since October, while Asia-Pacific stocks fell Monday morning with Japanese markets plummeting, where the Nikkei 225 plunged 4%.

The CBOE Volatility Index, or VIX, which represents the expected volatility of the U.S. stock market over the next 30 days, was up 16.6% on Friday.

The moves come as investors continue to digest the Federal Reserve’s new economic projections and fear the rate hikes will come sooner than expected.

Read more: The Fed will continue to dominate the market in the week to come after the massive sell-off

Last Wednesday, the Fed raised its inflation expectations and forecast rate hikes in 2023. St. Louis Fed Chairman Jim Bullard told CNBC’s “Squawk Box” on Friday that it was natural that the central bank leans a little more “hawkish” and saw higher interest rates as early as 2022.

Investors await public appearances from Fed members on Monday for further clues to the central bank’s monetary policy outlook.

Bullard and Dallas Fed Chairman Robert Kaplan are expected to speak virtually at the Official Forum of Monetary and Financial Institutions panel at 9 a.m. ET. New York (2:00 p.m. London time). Fed Chairman John Williams is expected to speak at a Midsize Bank Coalition of America event on Monday afternoon.

There are no major gains in Europe on Monday; data released includes German producer prices and UK retail sales for May and Eurozone current account data for April.

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