Toby Melville | Reuters The pan-European Stoxx 600 was down 0.8 percent in early afternoon, with autos down 3 percent leading losses as most sectors and major bourses traded in negative territory. Oil and gas stocks bucked the trend to gain 0.8%. Risk sentiment was dampened by hawkish messages from ECB policymakers, with Bundesbank President Joachim Nagel telling a German newspaper that the ECB should keep raising interest rates even as recession risks in Germany rise. Minutes from the ECB’s latest policy meeting will be released on Thursday, while investors will pay close attention to eurozone flash PMIs due on Tuesday. Asia-Pacific shares were mixed on Monday as caution prevailed, although Chinese markets rose after China’s central bank cut benchmark interest rates. U.S. stock futures fell in early early trading after the S&P 500 snapped a four-week winning streak on Friday as Wall Street looked ahead to Fed Chairman Jerome Powell’s comments on inflation at the annual economic conference on Friday of the Jackson Hole Central Bank. “We expect the market to approach the Jackson Hole Fed meeting fearing an aggressive message that could lead to a sharp risk-off move. However, we believe the message will be more nuanced and possibly even reassuring,” said Steve Englander, Global Head of FX Research and North American Macro Strategy at Standard Chartered. “For the Fed, reducing inflation to targets is non-negotiable. Chairman Powell is likely to say that the Fed will raise interest rates as necessary, and for as long as necessary, to reduce inflation.” There are no major corporate earnings or financial data releases expected outside Europe on Monday.
