By Peter Nurse
Investing.com - European stock markets are set to end the week on a negative note Friday, as investors nervously await the U.S. response to China tightening control over the city of Hong Kong, a major financial hub.
At 2:05 AM ET (0605 GMT), the DAX futures contract in Germany traded 0.2% lower. {{167|France's CACAC 40 futures were down 0.7%, while the FTSE 100 futures contract in the U.K. fell 0.7%.
China's parliament on Thursday pressed ahead with national security legislation for the city, raising fears over the future of its democratic freedoms.
U.S. President Donald Trump has already vowed a tough response should the law be agreed, and will hold a news conference later on Friday.
American relations with Beijing have been on edge since the Covid-19 pandemic reared its head, and a possible response could see the tearing up of the Phase 1 trade deal and the imposition of fresh tariffs on China.
This would place European governments in a difficult position over how to respond as they shift from battling the coronavirus to economic recovery, where trade with China is likely to play a big part.
In corporate news, Renault (PA:RENA) will be in the spotlight Friday after the French carmaker said it was launching talks with unions to reorganise and cease assembling vehicles at several plants in France, cutting some 15,000 jobs worldwide as it tries to survive a slump in sales. Its partner Nissan (OTC:NSANY) has also announced heavy cutbacks this week, including the closure of its plant in Barcelona.
Staying in the auto sector, Volkswagen (DE:VOWG_p) could be of interest after the German car manufacturer announced it would be investing 2 billion euros in the Chinese electric vehicle sector.
Oil prices were under pressure Friday, after government data showed late Thursday an unexpected rise in U.S. inventories. The Energy Information Administration said inventories rose 7.9 million barrels in the week ended May 22, backing up Wednesday’s report by the American Petroleum Institute.
At 2:05 AM ET, U.S. crude futures traded 2.3% lower at $32.94 a barrel. The international benchmark Brent contract fell 1.6% to $35.47.
Elsewhere, gold futures rose 0.4% to $1,719.50/oz, while EUR/USD traded at 1.1103, up 0.2% on the day.