Fed hike fears, Jackson Hole in focus

London Stock Exchange

Toby Melville | Reuters

The pan-European Stoxx 600 was down 0.9% by mid-afternoon as autos fell 3.4% to lead the losses, with most sectors and major exchanges trading in negative territory. Oil & Gas stocks bucked the trend to add 0.8%.

Risk sentiment was dampened by hawkish signals from ECB policymakers, with Bundesbank President Joachim Nagel telling a German newspaper that the ECB should continue raising interest rates even if recession risks in Germany were increasing.

The minutes of the ECB’s latest policy meeting will be released on Thursday, while investors will be watching flash Eurozone PMIs due on Tuesday.

Asia Pacific Equities were mixed on Monday as caution prevailed, although Chinese markets rose after China’s central bank cut its benchmark interest rates.

US Stock Futures fell in early pre-market trading after the S&P500 ended a four-week winning streak on Friday, as Wall Street eagerly awaits Friday’s comments from Fed Chairman Jerome Powell on inflation at the central bank’s annual economic symposium in Jackson Hole .

“We expect the market to approach the Fed meeting in Jackson Hole, fearing a hawkish message that could lead to a sharp drop in risk. However, we think the message will be more nuanced, and perhaps even reassuring “, said Steve Englander, global manager. North American FX research and macro strategy at Standard Chartered.

“For the Fed, getting inflation down toward targets is non-negotiable. Chairman Powell is likely to say the Fed will raise rates as far as it takes and for as long as it takes to reduce inflation. ‘inflation.”

There are no major corporate earnings or economic data releases expected in Europe on Monday.

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top