European stock market opened lower and outlook gloomy
2023.03.08 03:56
European stock market opened lower and outlook gloomy
By Tiffany Smith
Budrigannews.com – European stock markets are anticipated to open lower on Wednesday, following Wall Street’s sharp losses overnight as Fed Chairman Jerome Powell warned that interest rates could rise more than anticipated.
The DAX futures contract in Germany was down 1% at 02:00 ET (7:00 GMT), the CAC 40 futures contract in France was down 1%, and the FTSE 100 futures contract in the UK was mostly flat.
The weak close on Wall Street overnight, with the benchmark Dow Jones Industrial Average falling nearly 600 points, or 1.7%, is likely to lead European equities.
At the beginning of his two-day testimony to Congress, Federal Reserve Chair Jerome Powell stated in prepared remarks to the Senate Banking Committee, “The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated.” This statement came at the start of Powell’s testimony.
Powell added, “We would be prepared to increase the pace of rate hikes if the totality of the data were to indicate that faster tightening is warranted.”
These remarks indicated that a 50-bps increase in March was more likely than the 25-bps increase that had been widely anticipated.
Later on in the session, European Central Bank President Christine Lagarde is scheduled to speak at a World Trade Organization event in Geneva.
Given that she predicted a 50-basis-point hike over the weekend, her remarks will be carefully examined for hints about future monetary policy.
Retail sales in the largest economy in the euro zone fell by 0.3 percent in January, a decrease from the 5.3% decline in December. German industrial production increased by 3.5 percent in January, rebounding from the revised decline of 2.4 percent in the previous month.
Later in the session, revised fourth-quarter gross domestic product figures for the euro zone are also due.
In the business world, Adidas (ETR: ADSGN) declared Wednesday intends to cut its profit as a result of the monetary hit the active apparel goliath took after the end of its organization with rapper and style creator Ye (Kanye West).
Wednesday’s hawkish remarks from Fed Chair Powell about the likely resumption of interest rate hikes were partially offset by a surprise drop in U.S. oil stocks, which resulted in a largely unchanged price for oil.
According to information provided by the American Petroleum Institute, the crude stocks in the United States decreased by approximately 3.8 million barrels during the week that ended on March 3.
This would be the first decline after 10 consecutive weeks of construction, and it would suggest a tightening of supplies in this important market if official data on Wednesday confirms it.
U.S. crude futures were up 0.3 percent at $77.38 a barrel by 02:00 ET, while the Brent contract was down 0.1 percent at $83.21. As investors prepared for steeper U.S. rate hikes, both benchmarks fell more than 3% last session.
Additionally, EUR/USD traded 0.1% lower at 1.0539, and gold futures fell 0.1% to $1,817.60/oz.
