Europe Stocks Edge Down Ahead of Fed Testimony
July 10 2019 - 6:14AM
Dow Jones News
By Nathan Allen
-- U.S. futures, European equities decline
-- Asian stocks mostly advance
-- Pound weakens amid continuing U.K. political uncertainty
European stocks slipped on Wednesday as investors awaited
Federal Reserve Chairman Jerome Powell's congressional testimony,
where he will face questions on the central bank's interest rate
intentions.
The pan-continental Stoxx Europe 600 fell 0.2% midmorning to
extend Tuesday's losses, dragged down by food-and-beverage and
media stocks. Benchmark indexes in France and Germany also posted
modest declines.
In the U.S., futures for the S&P 500 and the Dow Jones
Industrial Average both fell around 0.1%. Futures don't necessarily
predict moves after the market open. The yield on 10-year U.S.
Treasurys rose to 2.107% from 2.058% on Tuesday. Yields and prices
move in opposite directions.
Data showed the British economy returned to growth in May,
reversing a two-month slowdown and easing fears of a contraction in
the second quarter. A 24% rise in car production drove the uptick,
as auto makers restarted factories they had idled in anticipation
of Brexit, which was originally scheduled to take place in
April.
However, analysts cautioned that the broader economic picture in
the U.K. remains subdued, despite the improvement in
manufacturing.
"Recent PMIs indicate that the service sector -- which makes up
the lion's share of the U.K. economy -- has struggled to regain
momentum amid mounting Brexit uncertainty," said James Smith, ING
developed markets economist, adding that he expects business
investment to resume its downward trend over the summer.
The pound rose slightly after the data but still hovered around
multi-month lows against the euro, while the FTSE 100 index edged
down 0.1%.
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.
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 1.7% to
$65.23 a barrel after data from U.S. industry group American
Petroleum Institute on Tuesday showed a sharp drop in oil stocks.
Gold fell 0.4%.
(END) Dow Jones Newswires
July 10, 2019 05:59 ET (09:59 GMT)
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