MARKET UPDATE-European equities should attempt a rebound (updated)

MARKET POINT-Return in sight in Europe before Powell’s great oral (updated)

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(Updated with futures, Europe bond market open, Tokyo close, UK inflation)

  • Red in sight for indices in Europe and Wall Street
  • The day will be dominated by the hearing of Jerome Powell in the Senate
  • Oil prices down sharply

by Laetitia Volga

PARIS, June 22 (Reuters) – Major European stock markets are expected to fall again on Wednesday, along with Wall Street, on concerns over economic growth and inflation a few hours before Jerome Powell’s highly anticipated speech, the chairman of the Federal Reserve (Fed), in Congress in Washington.

Futures contracts give a decline of 1.67% for the Parisian CAC 40

.FCHI , 1.55% for the Dax in Frankfurt .GDAXI , 1.18% for the FTSE in London .FTSE and 1.64% for the EuroStoxx 50.

The broad European Stoxx 600 index .STOXX has recovered 1.32% since Monday after three consecutive weeks of declines marked by concerns over inflation, interest rate hikes by major central banks and developments in the economy.

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

Main meeting of the session, Jerome Powell will speak from 1:30 p.m. GMT before the Senate Banking Committee, before a similar hearing before the House of Representatives on Thursday.

“He will likely be faced with questions about how far the Fed is willing to go in controlling inflation, i.e. how big the rate hike, (…) and whether the The Fed is prepared to let unemployment rise sharply to achieve this goal,” said Michael Hewson at CMC Markets.

VALUES TO FOLLOW: Stock market: stocks to follow in Paris and Europe

AT WALL STREET

Wall Street futures are signaling a decline of about 0.9% after the New York Stock Exchange’s positive session on Tuesday, supported by cheap buybacks on large-cap stocks and those in the energy sector. . .NFR

The Dow Jones .DJI gained 2.15% to 30,530.25 points, the S&P-500

.SPX gained 2.45% to 3,764.84 points and the Nasdaq Composite .IXIC advanced 2.51% to 11,069.30 points.

IN ASIA

The Nikkei on the Tokyo Stock Exchange .N225 lost 0.37%, in the wake of US futures.

Concerns over central bank policies and economic conditions are also affecting equity markets in China where the SSE Composite Index

.SSEC in Shanghai lost 0.52% and the CSI 300 .CSI300 0.63%.

OIL

The oil market is down as the US president is expected to plead on Wednesday for a temporary suspension of the federal gasoline tax of 18.4 cents per gallon, and at the same time increases the pressure on the giants of the sector which he considers partly responsible for the surge in crude oil prices.

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

Brent LCOc1 lost 3.86% to $110.23 a barrel and US light crude (West Texas Intermediate, WTI) CLc1 4.18% to $104.94.

CHANGES

The greenback is up 0.28% against a basket of benchmark currencies, including the euro, down to $1.0503.DXY, EUR=

The pound widened its losses slightly against the dollar and the euro in reaction to British inflation accelerating to 9.1% year on year in May, the most in 40 years. GBP= GBPEUR= GB-Inflation reaches 9.1% YoY in May nL8N2Y9196

The yen is recovering (+0.12%) after having fallen to its lowest level since 1998 against the dollar, the Japanese currency remaining penalized by the divergence of the monetary policies of the Bank of Japan and the Fed. JPY=

RATE

The renewed risk aversion is accompanied by lower bond yields: the ten-year US10YT=RR drops more than six basis points to 3.2371% and in early trade, the German ten-year DE10YT=RR retreats at 1.724%.

NO MORE MAJOR ECONOMIC INDICATOR ON THE JUNE 22 AGENDA

(Writing by Laetitia Volga, editing by Kate Entringer)

#MARKET #POINTReturn #sight #Europe #Powells #great #oral #updated


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