European stock index futures pointed to a sharply lower open on Friday, following the previous session’s 3.3 percent sell-off, due to mounting fears over Dubai’s debt woes. Futures for the DJ Euro Stoxx STXEc1, for Germany’s DAX FDXc1 and for France’s CAC FCEc1 were down 1.6-2.0 percent. Futures on the U.S. S&P 500 SPc1 tumbled more than 3 percent on Friday, extending losses after Dubai’s decision to suspend billions in dollars of debt repayments from two flagship companies stoked investor fears of a hefty default. The benchmark Nikkei fell 3.2 percent or 301.72 points to 9,081.52, coming within a breath of its July low of 9,050. The Topix lost 2.2 percent to 811.01.

Growth of broad money in the Eurozone fell sharply in October to a low of 0.3 per cent year-on-year, however last month lending to non-financial firms remained in negative territory. In September base effects saw private sector lending growth fall to -0.8 per cent from -0.3 per cent, driven by the steep fall in lending to non-financial firms of -1.2 per cent from -0.2 per cent. Yesterday, deepening fears over Dubai’s debt problems shook European stock markets, with the FTSE 100 index suffering its worst one-day loss since March. On Friday US retailers will unleash a barrage of post-Thanksgiving holiday shopping promotions, the National Retail Federation is expecting 134m Americans to head for the stores. Yesterday, the Bank of China signed an £86m deal for the prestigious City building One Lothbury. Japan’s Prime Minister has warned that his country risks falling into a “double-dip” recession. Due to the rush by retails investors to gold, the US government has suspended sales of the world’s most popular bullion. The shortage of the US Mint of Eagle coin is the latest sign of investors seeking a safe haven into bullion as the value of the US dollar remains uncertain.

Due for release today is the CHF KOF Economic Barometer and the CAD Current Account.

By Greg Secker