European stocks are seen opening broadly higher on Tuesday as investors react to comments from Federal Reserve Chair Jerome Powell and ECB’s Lagarde.
On Monday, Powell indicated inflation is cooling and interest rates may decrease further over time but there is no rush to cut rates quickly.
ECB President Christine Lagarde hinted at another cut in interest rates at the Bank’s next policy meeting in October, citing falling inflation and data pointing to a slowdown in the region.
Asian stocks were mixed in thin trade, with Chinese and Hong Kong markets closed for holidays. Japan’s Nikkei rallied nearly 2 percent after falling 4.8 percent on Monday.
The yen retreated for the second successive day as the BoJ Summary of Opinions indicated no immediate plans for further rate hikes and a key survey showed that big manufacturer sentiment held steady in the third quarter.
The U.S. dollar rose against key peers in Asian trading ahead of the release of manufacturing and job openings data later in the day.
Closer home, flash Eurozone inflation data due later in the day may show that the headline CPI dipped below the European Central Bank’s (ECB) 2 percent target in September.
Gold edged up slightly after falling for two straight sessions. Oil prices also rose after the Israeli military commenced a “limited, localized” operation against Hezbollah targets in southern Lebanon, raising concerns about regional stability.
U.S. stocks struggled for direction before closing higher overnight amid optimism that the economy is headed for a soft landing and that the Fed will continue cutting rates.
The Dow finished marginally higher and the S&P 500 rose 0.4 percent to reach record closing highs as Fed Chair Jerome Powell said the economy remains on solid footing.
He signaled that two more quarter-percentage-point cuts to the benchmark fed funds rate are possible this year but the downward path for rates is not on a preset course.
The tech-heavy Nasdaq Composite added 0.4 percent to extend its winning streak to two straight months.
European stocks fell on Monday after auto majors Stellantis and Volkswagen issued profit warnings.
The pan European STOXX 600 fell 1 percent. The German DAX shed 0.8 percent, France’s CAC 40 lost 2 percent and the U.K.’s FTSE 100 gave up 1 percent.
Business News
European Shares To Open On Firm Note Amid Rate Cut Bets
2024-10-01 05:38:44
