European stocks are likely to open on a firm note Wednesday after official data showed China’s manufacturing activity shrank for the third consecutive month in July, fueling bets on more stimulus measures.
At a meeting of Politburo on Tuesday, China’s leaders have pledged to prioritize boosting consumer spending and mentioned “counter-cyclical adjustments.”
Elsewhere, Japan’s central bank raised its benchmark rate to 0.25 percent and announced a bond tapering plan, aiming to halt the yen’s slide against the U.S. dollar.
Asian markets climbed, even as tech stocks showed mixed results following contrasting results from tech bellwether Microsoft and chipmaker AMD.
Oil prices jumped nearly 2 percent in Asian trade after settling at a seven-month low on Tuesday on China demand concerns.
The rebound came as industry data showed another U.S. stockpile draw and Israel said it has killed a top Hezbollah commander after carrying out a strike on a southern suburb of the Lebanese capital Beirut.
The dollar index eased while gold ticked higher ahead of the Fed’s monetary policy announcement and the release of ADP’s report on U.S. private sector employment later in the day.
The Fed is widely expected to leave interest rates unchanged, but the accompanying statement might provide hints on the timing and pace of interest-rate cuts in the next few months.
Traders have priced in a 100 percent chance for a September rate reduction, according to the CME FedWatch Tool.
Markets also look to flash inflation figures for the euro area later in the day after prices increased by a higher-than-expected 2.5 percent year on year in June. A year earlier, the rate had been 5.5 percent.
The Bank of England’s rate decision is due on Thursday, with markets remaining split on whether the central bank will deliver its first rate cut since the pandemic.
U.S. stocks ended mixed overnight as a two-day policy meeting of the Federal Reserve got underway and tech stocks came under selling pressure on valuation concerns.
The tech-heavy Nasdaq Composite tumbled 1.3 percent to reach its lowest closing level in well over a month and the S&P 500 dipped half a percent while the Dow gained half a percent.
European stocks closed higher on Tuesday ahead of key economic data releases and central bank meetings around the world.
The pan European STOXX 600 inched up half a percent. The German DAX rose half a percent and France’s CAC 40 added 0.4 percent while the U.K.’s FTSE 100 eased 0.2 percent.
Business News
European Shares Seen Opening Up On China Stimulus Hopes
2024-07-31 05:37:19
