Peter Nurse 

Investing.com – European stock market are likely to open lower on Monday, as investors worry about slower global growth and tight monetary policy. Emmanuel Macron’s win as French President will offer some relief.

The contract in Germany fell 1.9% at 2:05AM ET (605 GMT) while the one in France declined 0.9%. Meanwhile, the U.K. contract dropped 1.1%.

It was expected that Macron would win the Sunday late-night vote, easily beating Marine Le Pen’s challenge. It will offer markets stability and reassurance regarding France’s commitment towards an integrated Europe.

Although this was expected, it is still concerning that investors continue to be concerned about the ability of global economies to withstand the increasingly hawkish pivot by a number key central bankers, including the Federal Reserve, slowdown in Chinese economic growth as a result of COVID locksdowns, as well the effects of ongoing Russia-Ukraine warfare.

Fed Chair said last week a half-point interest rate increase “will be on the table” when the central bank meets in early May, suggesting a more hawkish path than projected at the central bank’s March meeting.

The ECB is also sending stronger tightening signals, with Vice President Luis de Guindos acknowledging last week the possibility of a rate increase in July, potentially the bank’s first in 12 years. 

Also weighing on sentiment are concerns about the outlook for growth in China, the world’s second largest economy, as it battles its most significant outbreak of COVID-19 since the original flare-up. 

Shanghai, China’s financial hub, reported almost 20,000 new cases on Sunday, suggesting the stringent containment measures in place for several weeks are only having a limited impact. Additionally, dozens of infections were found in Beijing, the nation’s capital, over the weekend.

The war in Ukraine is now in its third month. This adds to uncertainty in Europe. Talks are scheduled for Monday between U.S. Secretary Of State Antony Blinken, and Defense Secretary Lloyd Austin in Kyiv.

Corporate news: Swiss drugmaker Roche (SIX) reported a 10% increase in its first quarter sales. This confirms the company’s 2022 outlook. It was helped by strong COVID-19 antigen testing and strong customer demand.

On the flip side, Dutch health technology company Philips (AS:) said first quarter core profit dropped about a third from a year earlier, hit in part by a recall of a large number of its ventilators.

The main economic release in Europe on Monday will be the Ifo’s latest business from Germany, which is expected to show a small deterioration in sentiment.

Oil prices slumped to near two-week lows Monday on increased concerns that the spreading COVID outbreak in China, the world’s largest importer of crude, will stunt demand.

At 2:05 AM ET futures had traded 3.4% lower at $98.64/barrel, and the contract dropped 3.3% to $102.60. Both benchmarks declined by around 5% in the last week and now stand at levels that were last seen April 12.

The price of gold fell 0.9% at $1,916.05/oz while it traded 0.3% lower, at 1.0761.