Global stocks slid on Friday ahead of a possible U.S. government shutdown, while European shares came under fire after Donald Trump threatened to impose tariffs if consumers in the region did not increase their purchases of U.S. oil and gas. A key read of U.S. inflation later in the day could also help shape investor expectations for where the Federal Reserve may steer interest rates next year. A spending bill backed by Trump failed in the U.S.
House of Representatives on Thursday as dozens of Republicans defied the president-elect, which investors said highlighted the increased potential for political volatility. Trump, who assumes the U.S. presidency in January, has issued stark warnings to his country’s major trading partners to address their trade surpluses with the United States or be subject to hefty duties on their imports. 'I told the European Union that they must make up their tremendous deficit with the United States by the large scale purchase of our oil and gas,' Trump said in a post on Truth Social on Friday.Global stocks broadly fell on the day, with shares in Europe down 1%, set for a 3% drop this week, while U.S. stock futures fell 0.7-1.1%, indicating Wall Street was set to open lower. 'With Trump back in the mix there’s every chance we see that (political impasse) extend past the weekend, and possibly even a shutdown, so that will dominate the focus,' Eren Osman, managing director of wealth management at Arbuthnot Latham, said. 'I wouldn’t be going on holiday leaving any big open bets on right now - there’s definitely a propensity for some pretty wild swings in markets.' The cost of buying insurance against a potential U.S. sovereign default rose on Friday, reflecting investor concern about the possibility of a government shutdown this weekend. Credit default swaps (CDS), a derivative that ensures bondholders are paid if an issuer defaults, on six-month U.S
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