Recoil in sight in Europe before Powell's great oral

Recoil in sight in Europe before Powell’s great oral

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by Laetitia Volga

PARIS (Reuters) – Major European stocks are expected to fall again on Wednesday, as is Wall Street, on concerns about economic growth and inflation within hours of a much-anticipated speech by Jerome Powell, chairman of the Fed. Federal. (Fed), on Congress in Washington.

Futures contracts are down 1.67% for the Paris CAC 40, 1.55% for the Frankfurt Dax, 1.18% for the London FTSE and 1.64% for the EuroStoxx 50 .

The broad European Stoxx 600 index has recovered 1.32% since Monday after three consecutive weeks of decline marked by concerns about inflation, the rise in interest rates by the main central banks and the evolution of the economy .

The impact of the war in Ukraine and the tensions in the commodity markets should weigh on French growth, estimates the Banque de France, which lowered its forecasts for gross domestic product in 2022 and 2023.

Main meeting of the session, Jerome Powell will speak from 13:30 GMT before the Senate Banking Committee, before a similar hearing before the House of Representatives on Thursday.

“He will likely face questions about how far the Fed is willing to go to control inflation, that is, how big the rate hike will be … and whether the Fed is prepared to allow unemployment to rise substantially to achieve this goal.” ”, said Michael Hewson of CMC Markets.


Wall Street futures are pointing to a drop of around 0.9% after the positive session on the New York Stock Exchange on Tuesday, supported by cheap buybacks of large-cap and energy sector shares. [.NFR]

The Dow Jones index gained 2.15% to 30,530.25 points, the S&P-500 gained 2.45% to 3,764.84 points and the Nasdaq Composite advanced 2.51% to 11,069.30 points.


The Nikkei on the Tokyo Stock Exchange lost 0.37%, following US “futures”.

Fears related to central bank policies and the economic situation are also weighing on Chinese stocks, with the Shanghai SSE Composite Index down 0.52% and the CSI 300 down 0.63%.


The oil market is bearish as the US president is expected to advocate on Wednesday for a temporary suspension of the federal gas tax of 18.4 cents per gallon, while increasing pressure on the giants of the sector to which it considers partly responsible for the increase in crude oil prices.

The White House has invited executives from seven refineries and oil companies to a meeting Thursday to discuss ways to increase production capacity and lower energy prices.

Brent lost 3.86% to $110.23 a barrel and US light crude (West Texas Intermediate, WTI) lost 4.18% to $104.94.


The dollar rose 0.28% against a basket of benchmark currencies, including the euro, to $1.0503,

The pound slightly extended its losses against the dollar and the euro in reaction to the acceleration of British inflation to 9.1% year-on-year in May, the highest amount in 40 years.

The yen recovers (+0.12%) after falling to its lowest level since 1998 against the dollar, leaving the Japanese currency penalized by the divergence in the monetary policies of the Bank of Japan and the Fed.


The resurgence of risk aversion is accompanied by a fall in bond yields: the 10-year bond fell more than six basis points to 3.2371% and in early trading the German 10-year bond fell as low as 1.724%.

(Written by Laetitia Volga, edited by Kate Enterringer)

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