European Stock Futures Turn Lower Ahead Of Power Speech
Experts believe that the European stock markets will open lower in the Tuesday trading session. A major catalyst behind this poor performance of EU stock markets is due to hawkish comments from prominent other Fed officials. In addition, there's also the speech by Jerome Powell scheduled that could stir up the markets.
In Germany, the DAX futures were trading at a 0.7% loss, while France's CAC 40 futures were down by 0.6%. Similarly, the FTSE 100 futures from the UK was down by 0.5%. Overall, the markets were a little down due to negative sentiment surrounding the Jerome Powell speech.
Just a day ago, European stocks were edging higher at their 8-month high. The catalyst behind this was the hope that EU countries would only go through a shallow recession in 2023. But after the comments from Marry Daly and Raphael Bostic (two fed officials), everything has changed.
US To Keep Interest Rates Above 5%
According to these 2 fed officials, the US central bank will keep its interest rates above 5% for quite some time. This will help the country battle inflation, which is still at high levels.
This aggressive policy adopted by the Fed has raised fears that a recession in the USA has become highly likely. As a result, the global markets, including those from the European Union, have also turned negative.
Considering how the largest economy in the world is at risk of a recession, it would automatically send jitters to all the economies around the world.
Looking ahead, there's the speech from Mr. Powell, which will tell us about the future plans of the Fed and how it will untangle the interest rate & inflation situation.
In the EU region, retail sales from the UK increased by 6.5% during the last month. This data was released by the KMPG and the British Retail Consortium.
According to the KPMG head of the UK, the retail sales growth during December looks good. He also stated this is mainly due to the fact that things cost more new. As a result, it has masked the actual volume of goods purchased by the people.