FX.co ★ European Markets Head for Lower Open

European equity markets were prepared for a significant downturn on Friday, reflecting a worldwide sell-off following revelations from two US regional banks about loan issues related to losses and alleged fraud. This has reignited apprehensions about overarching risks in the credit market. The situation has triggered fears of a possible banking crisis similar to the one in 2023, which necessitated emergency interventions by the Federal Reserve to stabilize the financial landscape. Meanwhile, in France, political tensions have somewhat subsided as Prime Minister Sebastien Lecornu’s administration survived a no-confidence vote, although the possibility of unexpected legislative or presidential elections still looms. In premarket activity, futures for the Euro Stoxx 50 and Stoxx 600 indices were down by 1% and 1.1%, respectively.