Europe Stocks Edge Down Ahead of Fed Testimony

Date : 07/10/2019 @ 8:49AM
Source : Dow Jones News
Stock : FTSE 100 Index (UKX)
Quote : 7393.73  86.03 (1.18%) @ 12:36PM
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Europe Stocks Edge Down Ahead of Fed Testimony

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By Nathan Allen 

-- European equities decline

-- Asian stocks mostly advance

-- Pound weakens amid continuing U.K. political uncertainty

European stocks opened slightly lower Wednesday as investors awaited U.S. Federal Reserve Chairman Jerome Powell's congressional testimony, where he will face questions on the central bank's intentions.

Global stock markets rallied in June amid hopes for an interest-rate cut, but strong jobs data from the U.S. reduced the case for such an intervention, adding to uncertainty around the Fed's policy direction.

The pan-continental Stoxx Europe 600 fell 0.2% to extend Tuesday's losses, dragged down by food-and-beverage and utility stocks. Benchmark indexes in France and Germany also posted modest declines.

In the U.K., the pound hovered around multi-month lows against the euro as political uncertainty and fears over a no-deal Brexit persisted. The FTSE 100 edged down 0.1%.

British economic data including May gross domestic product and industrial production are due later in the morning. Analysts expect GDP to have grown around 0.3%, reversing a two-month contraction and providing some short-term support for the pound.

"A negative GDP read on the other hand would mark the third-straight month of contraction in Britain's economy and would give a stronger case for a further selloff in pound," London Capital Group senior market analyst Ipek Ozkardeskaya said.

In the U.S., futures for the S&P 500 and the Dow Jones Industrial Average both fell around 0.2%. Futures don't necessarily predict moves after the market open. The yield on 10-year U.S. Treasurys rose to 2.093% from 2.058% on Tuesday. Yields and prices move in opposite directions.

In addition to the Fed chief's testimony, minutes from the central bank's recent policy meeting are due for release later Wednesday, which could provide additional detail on how officials viewed the economic environment.

Asian markets were mostly higher ahead of the closing bell, although Shanghai-listed stocks slipped after Chinese consumer inflation held steady in June. The consumer-price index rose 2.7% on year, in line with expectations, as slowing nonfood prices offset faster gains in food prices.

The Mexican peso continued to trade lower against the dollar on Wednesday after the country's finance minister Carlos Urzúa resigned on Tuesday, citing disagreements with left-wing President Andrés Manuel López Obrador's economic policy.

Elsewhere, the Bank of Canada is expected to keep rates steady at its monetary-policy meeting later today.

In commodities global oil benchmark Brent crude rose 1.3% to $64.97 a barrel after data from U.S. industry group American Petroleum Institute on Tuesday showed a sharp drop in oil stocks. Gold fell 0.5%.


(END) Dow Jones Newswires

July 10, 2019 04:34 ET (08:34 GMT)

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