European stocks may struggle for direction on Wednesday as investors react to mixed comments from Federal Reserve officials on how the central bank should view its policy path.
Ahead of the Federal Open Market Committee meeting next month, Chicago Fed President Austan Goolsbee called for “prudence and patience” in the face of recent banking stress.
On the other hand, New York Fed President John Williams said that Fed officials still have more work to do to bring down prices and the rate path will depend on incoming data.
Investors await a report on U.S. consumer inflation and the minutes of the Federal Reserve’s last meeting later in the day for further direction.
Economists expect consumer prices to rise by 0.3 percent in March, while the annual rate of growth is expected to slow to 5.2 percent from 6.0 percent.
Reports on U.S. producer prices, retail sales and industrial production due later in the week could also have a significant impact on the outlook for interest rates.
The U.S. earnings season also remains on investors’ radar, with financial giants Citigroup, JPMorgan Chase and Wells Fargo due to report their quarterly results on Friday.
Asian markets were seeing modest gains, the dollar index dipped, and Treasury yields portrayed cautious optimism, while oil traded flat after climbing nearly 2 percent overnight. Gold rose about 1 percent on dollar weakness.
U.S. stocks ended mixed overnight after the International Monetary Fund cut its global growth forecast and warned it was too soon to sound the all-clear from the banking turmoil.
The S&P 500 finished marginally lower and the tech-heavy Nasdaq Composite dropped 0.4 percent, while the Dow gained 0.3 percent.
European stocks rose on Tuesday as traders returned to their desks following the long Easter holiday weekend.
The pan-European STOXX 600 climbed 0.6 percent as soft inflation data from China stoked optimism about additional stimulus.
The German DAX rose 0.4 percent, France’s CAC 40 index climbed 0.9 percent and the U.K.’s FTSE 100 added 0.6 percent.
Market Analysis
European Shares May Struggle For Direction Ahead Of US Inflation Data
2023-04-12 05:33:18
