European stocks lower as oil prices fall

LONDON -- European stock indexes opened lower on Monday after oil prices fell and riskier currencies took a hit during the Asian session.

The investors are worried that inflation pushing up interest rates will damage the global economy. In 18 months last week, global shares hit their lowest point in 18 months.

The MSCI world equity index, which tracks shares in 50 countries, was flat on the day, but still held above last week's lows at 0732 GMT.

Europe's STOXX 600 was down 0.5 percent, while London's FTSE 100 was down 0.4 percent.

We think investors have shown that their focus is now on the recession risk, despite the gloomy risk sentiment already. The European Central Bank will likely decide at its next meeting to end its stimulus programme in July and raise interest rates soon after that, with Germany's 10 year yield up 3 basis points at around 0.974 percent, which is a step higher than the eight-year high of 1.19 percent it reached last Monday.

The economic growth concerns could allow government bonds to function as safe havens, according to analysts.

It would take a lot of optimism for 10 Y Treasuries and Bund to test 3 percent and 1 percent to the upside in our view, they said.

The US 10 year yield was 2.9221 percent at 0741 GMT.

The dollar index, which last week surged to a 20 year high of 105.01, was down less than 0.1 percent at 104.47, down less than 0.1 percent on the day. The Australian dollar and British pound fell as a result of riskier currencies.

Since 2017, the euro was near its lowest level since 2017. The euro's weakness could threaten the central bank's efforts to steer inflation towards its target, according to Francois Villeroy de Galhau, a policymaker at the European Central Bank.

The UK labour market data is due on Tuesday and the UK inflation data will be out on Wednesday.

Oil prices fell as investors took profit from a recovery in the previous session.

Brent crude futures were down 1.2 percent, at $110.26 a barrel at 0755 GMT, while US West Texas Intermediate WTI crude futures were 0.8 percent, lower at $109.59 a barrel.

It was trading at around $29,532 last week and plunged to as low as $25,401. It was its lowest since December, 2020. After a popular stable coin, TerraUSD, collapsed and lost its dollar peg, cryptocurrencies sold off last week, as a result of declining risk appetite.