European Markets Seen Opening Weak

Markets in Europe are expected to open weak on Wednesday amidst a renewed focus on the Fed ahead of release of key data later in the week. Recent Fed commentary has led to fresh anxiety on the course of the monetary policy in the U.S. Global corporate earnings updates are also expected to sway sentiment, as trading progresses.

Wall Street had closed on a negative note on Tuesday amidst mixed earnings updates and a firm focus on the Fed. The Nasdaq Composite shed 0.04 percent to close at 12,153.41 whereas the Dow Jones Industrial Average lost 0.03 percent to finish trading at 33,976.63.

Sentiment was however buoyant at the European bourses and markets in the region closed with gains on Tuesday. Germany’s DAX rallied 0.59 percent. France’s CAC 40 followed with gains of 0.47 percent. Switzerland’s SMI finished 0.42 percent higher. The pan-European Stoxx-600 and U.K.’s FTSE 100, both added 0.38 percent.

Current indications from the European stock futures indicate a weak sentiment. The DAX Futures (Jun) is currently trading 0.09 percent lower. The FTSE 100 Futures (Jun) is currently trading 0.01 percent lower. The SMI Futures (Jun) had closed 0.52 percent higher on Tuesday. The CAC 40 Futures (May) had closed 0.49 percent higher whereas the pan-European Stoxx 50 Futures (Jun) had closed 0.02 percent lower on Tuesday.

American stock futures are trading in negative territory. The US 30 (DJIA) is down 0.15 percent whereas the US500 (S&P 500) is trading 0.16 percent lower.

Asian stock markets are trading mostly lower as Fed fears eclipsed China optimism. Hong Kong’s Hang Seng has dropped 0.59 percent. Japan’s Nikkei 225 has lost 0.26 percent. China’s Shanghai Composite is trading 0.16 percent lower. New Zealand’s NZX 50 has also declined 0.16 percent. India’s Nifty 50 has shed 0.09 percent. Australia’s S&P ASX 200 is flat. South Korea’s KOSPI has gained 0.40 percent.

The Dollar Index (DXY), a measure of the Dollar’s strength relative to six currencies, strengthened to 101.81, up 0.07 percent on an overnight basis. The EUR/USD pair has decreased 0.08 percent to 1.0962 whereas the GBP/USD pair has lost 0.08 percent to trade at 1.2414.

Gold prices declined amidst lingering rate hike fears. Gold Futures for June settlement are trading at $2,015.35 per troy ounce, down 0.22 percent on an overnight basis.

Crude prices declined further as worries about interest rate hikes dampened positive sentiment created by the draw in crude oil inventories in the U.S. Brent Crude Futures for June settlement decreased 0.35 percent to $84.47 whereas WTI Crude Futures for June settlement decreased 0.35 percent to $80.62.

U.K. awaits the inflation readings for the month of March. Headline inflation is seen falling to 9.8 percent, from 10.4 percent in the previous month. Core Inflation is seen cooling to 6 percent, from 6.2 percent in the previous month. Monthly inflation is seen easing to 0.5 percent, from 1.1 percent in the previous month.

Major earnings updates due on Wednesday from the region include ASML Holding, L’Oreal, Abbott Labs, IBM, Rio Tinto, Heineken, Antofagasta, Legal & General, La Francaise, Covivio, Verallia and Just Eat Takeaway.

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