European stock markets drop sharply after the crash of US banks: Piazza Affari loses more than 2%

A steep start for the European stock exchanges in the wake of the heavy drop recorded yesterday evening by Wall Street and awaiting the data on the US labor market, which are decisive for understanding the future orientation of the Fed on interest rates. After the first trades, Frankfurt lost 1.54%, London 1.67%, Paris 1.76% and Milan 2.08%. Among investors, there is strong nervousness after the “hawkish” tone used by the Fed Chairman, Jerome Powell, in a hearing to Congress.
The head of the stars and stripes central bank has warned that the bank is ready to accelerate the rate of increases in the cost of money to combat persistent inflation. The market is now increasingly betting that the Fed’s rate decision in March will be a half percentage point hike, accelerating from the 25 basis point hike in early February.
In Europe, German inflation remained high in February, with consumer prices rising by 0.8% on a monthly basis and an 8.7% trend increase. The data suggests that the European Central Bank will still have its work cut out for it to contain the overheating of consumer prices. UK gross domestic product rose 0.3% in January, an improvement from a steep 0.5% drop in December, but industrial production fell 0.3% in the same month, highlighting the economic difficulties that the country is going through.
Oil prices are also falling and heading for their worst weekly loss in five weeks on fears that sharp interest rate hikes in the US could dampen economic activity and, as a result, growth. crude oil demand of the world’s largest consumer. Further nervousness comes from China, where the disappointing macroeconomic data suggest that it will take longer than expected for the Dragon economy to finally restart after the long period of lockdown.