European Shares To Open On Tepid Note Ahead Of Powell Speech

(RTTNews) - European stocks look set to open on a tepid note Wednesday as investors evaluate the latest comments by a pair of Federal Reserve officials.

San Francisco Fed President Mary Daly echoed said Tuesday that it will take more disinflation progress to allow the Fed to lower rates, but officials should pay more attention to the risk of keeping interest rates high for too long.

Separately, Cleveland Fed President Loretta Mester said she had continued to pencil in three rate cuts this year.

The CME's FedWatch tool now factors in around 62 percent odds of a Fed rate cut in June, down from about 70 percent probability a week ago.

Asian stocks slipped deep into the red as higher commodity prices posed additional risk to the inflation and interest rate outlook.

Meanwhile, investors ignored the results of a private survey showing that China's services sector activity grew as expected in March.

The dollar was on the front foot while oil and gold extended gains amid signs of escalating tensions in West Asia.

Trading later in the day may be impacted by reaction to reports on Eurozone flash inflation and unemployment.

Across the Atlantic, remarks by Fed Chair Jerome Powell along with the release of reports on private sector employment and service sector activity may sway markets.

U.S. stocks ended lower overnight as the yield on the benchmark ten-year note reached a four-month high on comments from Fed officials signaling higher interest rates for longer.

Encouraging readings on job openings and factory orders also added to skepticism about the pace of Fed easing.

The Dow gave up 1 percent and the S&P 500 dipped 0.7 percent to extend Monday's losses while the tech-heavy Nasdaq Composite declined 1 percent.

European stocks closed lower on Tuesday after the release of euro zone manufacturing, German inflation and U.K. house price data.

The pan European STOXX 600 shed 0.8 percent as trading resumed after a long holiday weekend.

The German DAX lost 1.1 percent, France's CAC 40 dipped 0.9 percent and the U.K.'s FTSE 100 slid 0.2 percent.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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