European Shares Seen Opening Mixed As Yields Ease
European stocks are seen opening mixed on Wednesday as traders slash bets on interest-rate hikes from global central banks.
Rising economic risks tempered investor expectations for how steeply the Federal Reserve will raise interest rates.
The outlook for a 50 basis point hike at the March 16 Fed meeting has dissipated, though a smaller 25 basis point hike is seen as a virtual certainty.
Federal funds futures markets now price only a 5 percent chance of a 50 basis point hike at the upcoming Fed meeting.
Market participants await Fed Chair Jerome Powell’s testimony before the U.S. Congress on Wednesday and Thursday for more clarity on interest rates.
Asian markets were mostly lower and oil prices surged over $5 per barrel after U.S. President Joe Biden announced he was joining U.S. allies in closing the country’s air space to Russian aircraft.
Brent oil extended its relentless rally above $110 a barrel despite an agreement by the United States and other major governments in the International Energy Agency to release 60 million barrels from strategic reserves to stabilize supply.
In an annual State of the Union speech, Biden said he would take robust action to protect American businesses and consumers.
Gold slipped on a firmer dollar as Russia’s invasion fueled fears of global economic turmoil. American oil and gas giant ExxonMobil is ending its decades-long involvement in Russia, following similar decisions by British oil giants BP PLC and Shell, and Norway’s Equinor ASA.
Bitcoin extended a two-day rally, leading broad-based gains in cryptocurrencies.
In economic releases, unemployment data from Germany, U.K. Nationwide house price figures and the euro zone flash inflation data are due later in the day.
Overnight, U.S. stocks fell sharply and bonds rallied, as Russian forces stepped up attacks on Ukraine and oil topped $105 a barrel, adding to concerns surrounding inflation and growth.
The Dow lost 1.8 percent, while the S&P 500 and the tech-heavy Nasdaq Composite both shed around 1.6 percent.
European stocks slumped on Tuesday amid concerns that the Ukraine-Russia conflict could exacerbate inflation and suppress growth.
The pan European Stoxx 600 declined 2.4 percent. The German DAX plunged 3.9 percent, France’s CAC 40 plummeted 3.9 percent and the U.K.’s FTSE 100 gave up 1.7 percent.
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