European Shares Seen Flat To Slightly Lower At Open
European stocks are seen opening on a tepid note Wednesday, as investors await Fed Chair Jerome Powell’s second day of testimony on Capitol Hill.
U.S. reports on private sector employment, job openings and the Fed’s Beige Book survey results may also offer additional clues on the economic and rate outlook. The non-farm payrolls report due on Friday is another pivot point for markets.
The Fed’s next monetary policy meeting is scheduled for March 21-22, with CME Group’s FedWatch Tool currently indicating a 70.5 percent chance of 50 basis point rate increase.
Closer home, industrial production and retail sales data from Germany and revised quarterly national accounts from the euro area are due later in the session, headlining a light day for the European economic news.
Asian markets followed Wall Street lower, with tech-heavy bourses such as Hong Kong leading losses after Powell flagged sharper rate hikes to rein in stubbornly high inflation depending on incoming data.
The dollar scaled multi-month highs against most other major currencies on safe-haven demand after a part of the yield curve saw its deepest inversion in more than four decades.
Gold traded flat near one-week low while oil prices steadied in Asian trading after plummeting between 3.5 percent and 4 percent on Tuesday on rate hike jitters.
Traders await crude inventory data from the U.S. Energy Information Administration later in the day after industry data showed an unexpected draw in U.S. crude oil inventories.
U.S. stocks tumbled overnight after Powell told lawmakers the U.S. central bank would be prepared to reaccelerate the pace of rate hikes if the economy grows too quickly.
The Dow lost 1.7 percent, the tech-heavy Nasdaq Composite shed 1.3 percent and the S&P 500 gave up 1.5 percent.
European markets ended Tuesday’s session lower on expectations of bolder moves from the Fed and the ECB to fight inflation.
The pan European STOXX 600 declined 0.8 percent. The German DAX dropped 0.6 percent, France’s CAC 40 index declined half a percent and the U.K.’s FTSE 100 slipped 0.1 percent.
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