Fed Chair is expected to offer some cues on monetary policy that will set fresh direction for markets
US stocks finished mixed on Wednesday amid a light calendar of economic data this week. Equities were also helped by lower 10-year Treasury yields that settled around 4.513%, down from 4.570% in the previous session. Still, an auction of 10-year bonds saw weak demand. Investors turned more cautious in anticipation of Federal Reserve commentary, with Chairman Jerome Powell set to speak later in the day. The S&P 500 edged up 0.1%, the Nasdaq Composite gained 0.08%, and the Dow Jones dropped 0.12%. The tech-heavy index is now up nine days in a row, while the S&P 500 has advanced for eight straight sessions.
In Asia, equities rose marginally on Thursday, with gains limited amid concerns over China following weak inflation data. According to the official report, both consumer and producer inflation shrank last month, putting the country in disinflation territory for the first time since summer. Against this backdrop, Chinese stocks largely lagged their regional peers during the session. The Shanghai Composite index added just 0.03%, while Hong Kong’s Hang Seng index slid 0.33%. Buoyed by strong earnings reports from Sony and Nintendo, Japan’s Nikkei 225 was the best performer among its peers to advance nearly 1.6%.
European stocks opened in a subdued manner today, with major indexes mostly in negative territory ahead of Powell’s speech. Market participants were disappointed by fresh data out of China, a major export market for Europe’s largest companies. Also, investors expect Fed Chair to offer some cues on monetary policy that will set fresh direction for markets. Elsewhere, ECB vice president said earlier today that the central bank still sees inflation risks so it’s too early to discuss a rate cut. Hawkish remarks added to a cautious tone in the regional markets.
In currencies, the US dollar has been rising for the fourth day in a row on Thursday. The USD index failed to challenge the 106.00 mark during the previous session, lacking the upside momentum despite persisting bullish bias. The euro weakened after fresh data showed inflation in Germany fell to its lowest rate in more than two years. EURUSD found support around 1.0660 before bouncing marginally. On Thursday, the pair is challenging the 1.0700 figure, losing less than 0.1% in early European deals. Should the greenback receive a boost from Powell, the shared currency may see another slump, this time below the 55-DMA, today at 1.0645.