European stocks are likely to open lower on Friday after U.S. Federal Reserve Chairman Jerome Powell disappointed investors by not indicating that the Fed might step up purchases of long-term bonds to cap rising long-term interest rates.
U.S. 10-year yield jumped and the dollar held firm near three-month highs, pulling gold prices to near nine-month lows.
Oil extended overnight gains to rally toward $65 a barrel after OPEC+ chose not to relax supply curbs and stick with current quotas for April with some exceptions.
Asian stocks skidded to one-month lows after China set a conservative economic growth target of above 6 percent for 2021, well below what economists had forecast, and outlined fiscal support to support economic recovery from the coronavirus pandemic.
On the U.S. stimulus front, Senate Democrats on Thursday came out with their version of the $1.9 trillion Covid relief bill, setting the stage for its approval as soon as this weekend.
Factory orders data from Germany is due later in the session, headlining a light day for the European economic news. Economists expect orders to grow 0.7 percent sequentially in January, reversing a 1.9 percent fall in December.
Across the Atlantic, trading may be impacted by reaction to the Labor Department’s closely watched monthly employment report for February.
Economists expect employment to increase by 182,000 jobs after an increase of 49,000 jobs in January. The unemployment rate is expected to hold at 6.3 percent.
U.S. stocks tumbled overnight as treasury yields spiked in reaction to comments by Federal Reserve Chair Jerome Powell that the reopening of the economy could “create some upward pressure on prices.”
The Fed chief, however, said he expects the increase in inflation to be “transitory” and stressed there is “a lot of ground to cover” before price growth reaches a sustainable level above the Fed’s 2 percent target.
The Dow Jones Industrial Average and the S&P 500 slumped 1.1 percent and 1.3 percent, respectively to their lowest closing levels in a month, while the tech-heavy Nasdaq plunged 2.1 percent to a two-month closing low.
European stocks closed mostly lower on Thursday, with concerns about inflation and high valuations keeping investors nervous.
The pan European Stoxx 600 eased 0.4 percent. The German DAX slipped 0.2 percent and the U.K.’s FTSE 100 shed 0.4 percent while France’s CAC 40 index ended on a flat note.
Business News
European Shares Likely To See Tepid Start
2021-03-05 05:36:46
