European Shares Set For Positive Open
European stocks look set to open higher on Thursday after Fed Chair Jerome Powell reiterated the central bank’s tolerant stance on inflation and the recent rise in bond yields.
Asian markets gave up some early gains to turn mixed as yields rose bolstered by a Nikkei report that the Bank of Japan is considering widening the targeted trading-range around the 10-year yield.
Gold prices rose on dollar weakness while oil fell after data showed a rise in U.S crude stockpiles.
Markets now look ahead to the policy statements from the Bank of England (BoE) and the Bank of Japan (BoJ), due today and tomorrow, respectively.
With no change expected in interest rates or the pace of stimulus, analysts will likely focus on the tone and the outlook from the BoE. The BoJ will release the finding of its policy review alongside the policy statement.
Eurostat publishes foreign trade data later in the session. The trade surplus is expected to fall to EUR 25.3 billion in January from EUR 29.2 billion in December.
Across the Atlantic, trading may be impacted by reaction to a report on weekly jobless claims.
U.S. stocks rose overnight and yields on longer-maturity U.S. debt retreated from more than one-year high after the Federal Reserve forecast stronger economic growth and higher inflation this year but indicated it expects to keep interest rates at near-zero levels through 2023.
The central bank also reiterated its plans to continue purchasing bonds at a rate of at least $120 billion per month until “substantial further progress” has been made toward its policy goals.
The Dow rose 0.6 percent and the S&P 500 added 0.3 percent to reach new record closing highs while the tech-heavy Nasdaq Composite index edged up 0.4 percent.
European stocks closed lower on Wednesday, with chip stocks seeing some pressure after a Samsung Electronics executive warned of problems with global shortages.
The pan European Stoxx 600 slid half a percent. France’s CAC 40 index closed nearly unchanged and the U.K.’s FTSE 100 dropped 0.6 percent while the German DAX rose 0.3 percent.
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