European stocks may drift lower at open on Wednesday after China’s factory-gate prices rose sharply in February, adding to speculation that the People’s Bank of China will tighten policy this year.
The producer price index rose 1.7 percent in the month, compared with January’s 0.3 percent increase, the National Bureau of Statistics said. At the same time, the country’s consumer price index slipped into deflationary territory for a second straight month compared with the prior year.
Asian markets are trading mixed as investors await the final vote on U.S. President Biden’s $1.9 trillion stimulus plan expected later today.
The stimulus plan provides direct payments of up to $1,400 for most Americans and extends emergency unemployment benefits that help to support consumer spending.
Gold inched lower after posting its biggest jump in two months a day earlier. Oil extended overnight losses as firmer U.S. Treasury yields pushed the dollar higher.
Bitcoin broke through $55,000 on growing talk of institutional interest and amid speculation that it will become a better accepted new asset class.
The European Central Bank announces its monetary policy decision on Thursday, with most economists expecting the central bank to step up its asset purchase pace.
Across the Atlantic, trading later in the day may be impacted by reaction to a Labor Department report on consumer prices amid too much ado about pace of uptick in yields.
U.S. stocks gained ground overnight as a retreat in bond yields prompted investors to pick up battered technology stocks.
The tech-heavy Nasdaq Composite soared as much as 3.7 percent and the S&P 500 climbed 1.4 percent while the Dow Jones Industrial average came off from its highs to end 0.1 percent higher.
European stocks closed higher on Tuesday as Euro zone government bond yields dipped across the board and the OECD raised its 2021 global growth forecast.
The pan European Stoxx 600 advanced 0.8 percent. The German DAX and France’s CAC 40 index both rose about 0.4 percent while the U.K.’s FTSE 100 edged up 0.2 percent.
Market Analysis
European Shares Set For Soft Start On Policy Tightening Woes
2021-03-10 05:40:16
