Adding to investor concerns, fresh economic data out of the Eurozone came in lower than expected
After a negative start to the session, US stock indices bounced but failed to preserve gains to close slightly negative after volatile trading. Equities briefly rallied after Fed’s Powell talked about “demand destruction”, probably implying a scenario where that the central will not have to raise rates aggressively later this year. Meanwhile, Fed’s Evans said that a 75-bps rate hike in July would be in line with continued inflation concerns. On a closing bell, the Dow fell 0.15%, the S&P 500 gave up 0.13% (at the high the index was up 0.98%), while the Nasdaq Composite shed 0.15%.
Asian stocks were mixed-to-higher on Thursday, despite the broadly negative cues overnight from Wall Street. In part, investors were slightly relieved after Powell said the Fed is not trying to engineer a recession to stop inflation but is fully committed to bringing prices under control. The Nikkei 225 in Tokyo finished up less than 0,1% after the data showed that the manufacturing sector in Japan continued to expand in June, albeit at a slower rate. Elsewhere, the Shanghai Composite in China rose 1.62% while Hong Kong’s Hang Seng advanced 1.26%. On the negative side, the Kospi in Seoul retreated 1.22%.
In Europe, stocks opened lower, with the pan-European Stoxx 600 dropping 1.2% in early trade, with basic resources shedding 2.1% to lead losses as all sectors and major bourses slid into negative territory. Adding to economic concerns, flash estimates of French and German PMI readings for June came in weaker than expected. The German composite PMI dropped to 52.0, below a forecast of 54.0.
In the currency market, the US dollar is back in positive territory on Thursday after yesterday’s failed attempt to challenge the 105.00 mark. The USD index regained the 104.50 area but the upside potential looks limited for the time being amid mixed risk environment. EURUSD came across the descending 20-DMA yesterday to finish higher for the third session in a row. On Thursday, the shared currency fell back from local highs to slip below the 1.0500 figure during the early European hours, pressured by weak economic data coupled with a stronger US dollar. The immediate support now arrives at 1.0470.
