European Shares Set To Open Lower As Powell Speech Looms
European stocks are seen opening lower on Wednesday as investors react to cautious comments from Fed officials on the future rate path and await Chair Jerome Powell’s speech for further clarity.
Fed Governor Christopher Waller said in a speech on Tuesday that Q3 U.S. GDP growth was a “blowout” performance that warrants a very close eye when thinking about policy going forward.
Fellow Governor Michelle Bowman said that the economy is gaining speed and requires a higher Fed policy rate.
Both Federal Reserve Bank of Minneapolis President Neel Kashkari and Chicago Fed President Austan Goolsbee also refused to rule out rate cuts, citing sticky inflation and resilience in the U.S. economy.
Fed Chair Powell is due to deliver opening remarks at the Division of Research and Statistics Centennial Conference today and participate in a policy panel discussion before the 24th Jacques Polak Annual Research Conference on Thursday.
Asian markets traded mixed, and gold fell on dollar strength while U.S. Treasury yields stabilized ahead of a $40 billion auction of 10-year notes due today and a $24 billion sale of 30-year bonds on Thursday.
Oil prices were little changed after falling more than 4 percent on Tuesday to their lowest since late July on demand concerns, signs of higher supply and easing Middle East tensions.
In the Middle East, Israel said Tuesday that its ground forces were battling Hamas fighters deep inside Gaza’s largest city, signaling a major new stage in the month-old conflict.
U.S. stocks ended higher overnight as long-term Treasury yields fell after a solid auction of $48 billion in 3-year notes.
The tech-heavy Nasdaq Composite climbed 0.9 percent and the S&P 500 rose 0.3 percent to post their longest streak of gains in two years while the Dow edged up 0.2 percent to log a seventh straight day of gains.
European stocks fell on Tuesday as growth worries returned to the fore. The pan European STOXX 600 slid 0.2 percent.
The German DAX inched up 0.1 percent, while France’s CAC 40 slipped 0.4 percent and the U.K.’s FTSE 100 eased 0.1 percent.
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