Peter Nurse 

Investing.com – European stock markets are expected to open lower, continuing last week’s selloff, as the threat of war in Ukraine adds to concerns surrounding high inflation and the prospect of U.S. Federal Reserve interest rate hikes.

At 02:10 AM ET (710 GMT), Germany’s contract traded 0.5% lower while France fell 2.2% (and the U.K contract dropped 0.1%).

Wall Street pressured European stocks to close lower last Friday as they feared that U.S. inflation will drive the Federal Reserve to increase monetary policy. They started with a 50-basis point hike in March. These were further compounded by a dip in the index.

Mary Daly, President of San Francisco Fed tried to downplay market expectations for a half point move on Sunday in an interview. She said that being too aggressive and abrupt about policy might be counterproductive.

However, these comments largely fell on deaf ears with investors turning their attention to concerns that Russia could invade Ukraine in the near future with U.S. National Security Advisor Jake Sullivan telling CNN on Sunday there’s “a distinct possibility that there will be major military action very soon.” The U.S. and several other western countries have advised their nationals to leave the country.

As the tensions escalate, German Chancellor Olaf Scholz will continue his diplomatic assault by touring Ukraine in the later part of the day. He’ll then travel to Moscow the next day. 

Oil prices rose Monday, reaching $100 per barrel after these tensions were raised. Many fear that an invasion of Ukraine would lead to sanctions on Russia’s financial system, making it impossible for western companies to pay for Russian crude exports and forcing them to chase supplies elsewhere on the global market. 

Russia is one of the world’s top crude producers, and such a disruption to global supply would occur just as the Organization of the Petroleum Exporting Countries and its allies, including Russia, struggles to ramp up output to cope with recovering demand. 

Futures were trading 1.3% higher at $94.31 per barrel by 2:10 am ET. This is just below its high in September 2014. Contracts rose 1.2%, to $95.52, having previously reached its highest point since October 2014.

Corporate sector Clariant After an accounting investigation led to delays in publishing 2021 results by the Swiss chemical group, SIX will likely be the focus of attention.

Glencore (OTC 🙂 might also be under scrutiny Monday following Bloomberg’s report that Bluebell Capital Partners, activist investor, has called for Glencore’s restructuring of its coal infrastructure and possible spin-off.

Commerzbank’s (DE:) stock has fallen sharply premarket, after Germany’s Finance Minister stated that the government will not retain its long-term stake in the lender. This stock still falls far short of the amount Angela Merkel’s government spent on it a decade ago.

Furthermore, it rose 0.6% to $1853.75/oz and traded 0.1% less at 1.1342.