European Shares To Open Slightly Lower After Tuesday's Rally
European stocks may open on a sluggish note Wednesday after seeing sharp gains in the previous session.
The dollar continued to weaken amid the pullback in Treasury yields as dovish comments from Fed officials suggested that the U.S. central bank is shifting away from further rate hikes.
Atlanta Fed Bank President Raphael Bostic said on Tuesday the central bank need not raise borrowing costs any further.
Minneapolis Fed President Neel Kashkari made similar remarks and voiced his uncertainty about the impact of the recent increase in the 10-year Treasury yield.
Investors now look ahead to the release of minutes of the Fed’s September policy meeting later in the day and U.S. inflation data due on Thursday for further clues on the interest rate outlook.
Closer home, Destatis is scheduled to issue Germany’s final consumer and harmonized price data for September later in the day.
The flash estimate showed that consumer price inflation slowed to 4.5 percent, the slowest since February 2022, from 6.1 percent in August. The statistical office is expected to confirm the preliminary estimate.
Asian stocks hit two-week highs on dovish Fed views and amid speculation that China is considering raising its budget deficit.
Oil edged up slightly and gold steadied near a more than one-week high as the Israel-Hamas conflict in the Gaza Strip entered its fifth day and the death toll increased to more than 2,100.
U.S. stocks closed higher for a third day on Tuesday as bond yields tumbled on dovish Fed comments and oil prices eased after rallying in the previous session.
The Dow edged up 0.4 percent, the S&P 500 gained half a percent and the tech-heavy Nasdaq Composite advanced 0.6 percent.
European stocks closed Tuesday’s session on a buoyant note following dovish comments from Fed officials and reports that China is mulling new stimulus to bolster growth.
The pan European STOXX 600 jumped 2 percent. The German DAX and France’s CAC 40 both surged around 2 percent while the U.K.’s FTSE 100 added 1.8 percent.
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