European Shares Set To Drift Lower Ahead Of BoE Rate Decision
European stocks are seen opening lower on Thursday as investors fret about inflation and interest rates staying for longer.
After hawkish Fed remarks, the Bank of England’s interest-rate decision will be in the spotlight today.
The BoE is anticipated to mark the final rate hike in the current tightening cycle as wages defy the economic slowdown.
Central banks in Turkey, Sweden, Switzerland and Norway will also make their monetary policy announcements today while the Bank of Japan’s policy statement is due Friday.
In economic releases, preliminary consumer confidence figures for the euro zone in September as well as U.S. reports on weekly jobless claims, existing home sales and Philadelphia-area manufacturing activity may influence trading sentiment as the day progresses.
Asian markets fell broadly, with benchmark indexes in Australia, Japan, South Korea and Australia all falling over 1 percent amid concerns over rising Treasury yields.
The dollar rose to six-month high, weighing on gold prices. Oil extended overnight losses on fears that higher interest rates could potentially impact crude demand adversely.
U.S. stocks declined overnight after the Fed left interest rates unchanged, as widely expected, but raised its forecast for rates at the end of next year saying that battle against inflation was far from over. The updated projections imply that rates will finish 2023 at 5.5-5.75 percent.
The tech-heavy Nasdaq Composite lost 1.5 percent to reach its lowest closing level in almost a month while the S&P 500 shed 0.9 percent and the Dow eased 0.2 percent.
European stocks advanced on Wednesday as investors reacted to positive U.K. consumer inflation and German producer price data.
The pan European STOXX 600 gained 0.9 percent. The German DAX climbed 0.8 percent, France’s CAC 40 gained 0.7 percent and the U.K.’s FTSE 100 rallied 0.9 percent.
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