Now, most attention will be on Thursday’s European Central Bank meeting
Wall Street stocks were mostly lower overnight as investors continued to digest Friday’s weak jobs report. Also, Goldman Sachs downgraded its economic outlook over the weekend and now sees 5.7% annual growth in 2021. Meanwhile, Morgan Stanley downgraded U.S. equities to underweight on Tuesday. Against this backdrop, the S&P 500 fell 0.34%, the Dow Jones Industrial Average dropped 0.76%, while the technology-heavy Nasdaq Composite rose less than 0.1%.
Asian equities finished lower on Wednesday as risk sentiment deteriorated further amid the persistent pandemic-related concerns. The Hang Seng in Hong Kong shed 0.12%, the Shanghai Composite index in China dipped 0.04%, while Australia’s S&P/ASX 200 lost 0.24%. Bucking the trend, Japan’s Nikkei 225 gained 0.89% after economic growth for the second quarter was revised up to an annual pace of 1.9% from a preliminary estimate of 1.3%.
In Europe, stocks declined as well amid nervousness over economic growth. The pan-European Stoxx 600 fell 1% in early trade, with financial services leading losses. Now, most attention will be on Thursday’s European Central Bank meeting. The central bank officials could discuss a reduction in its asset purchasing program.
In currencies, the dollar has been on the offensive since the beginning of the week. Adding to recent gains, the USD index rose to the 92.70 region on Wednesday, picking up an extra pace on the back of risk aversion. Also, yields of the key US 10-year note climbed to new multi-day highs beyond 1.38%. As such, the euro slipped to the 1.1816 area in recent trading, threatening the 1.1800 figure as the ECB meeting looms. If this support zone gives up in the short term, the 20-DMA around 1.1780 will come into market focus.
