European Markets Open to Shutdown, Jobs Report, Inflation Data, Fed

LONDON – European stocks are expected to open lower Monday as investors prepare for more key inflation data out of the US this week.

The UK’s FTSE index opens 65 points lower at 7,137, Germany’s DAX is down 124 points at 12,879, France’s CAC 40 is down 61 points at 5,969 and Italy’s FTSE MIB is down 170 points at 21,428, according to data from IG.

The lower open for European equities comes after markets in the region closed higher last Friday as investors digested a stronger-than-expected US jobs report, which showed that the economic downturn of concern to investors has not yet arrived.

The jobs report, while good for the economy, could encourage the Federal Reserve to continue its aggressive rate hikes in the coming months to combat continued high inflation. It will be tested with a slew of US earnings from major banks and the most recent consumer inflation reading coming out this week.

The June consumer price index on Wednesday is expected to show headline inflation, including food and energy, above May’s 8.6% level.

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Elsewhere, investors in the UK will watch developments around political uncertainty in the country after Prime Minister Boris Johnson announced last week that he would step down as leader of the Conservative Party. Johnson said he would remain in the post as long as a successor was found and a number of leading conservatives announced their leadership bids this weekend.

In Asia-Pacific markets, Hong Kong’s Hang Seng index fell more than 2% overnight after news that China has fined heavyweights Tencent and Alibaba.

China has fined several companies, including tech giants Alibaba and Tencent, for failing to comply with anti-monopoly rules on transaction disclosure, according to Reuters.

There are no big gains or data releases on Monday.

— Patti Domm and Abigail Ng of CNBC contributed to this market report.

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