European Shares Seen Slightly Higher In Cautious Trade

European Shares Seen Slightly Higher In Cautious Trade

January 17, 2023

European stocks look set to open on a positive note Wednesday despite lingering growth worries and uncertainty about how much longer the Fed will remain hawkish.

Asian markets traded mostly higher amid optimism over demand from China.

The World Bank cut its growth outlook for China for 2023, noting that a faster-than-expected reopening poses great uncertainty for its economic recovery.

The dollar steadied ahead of U.S. consumer inflation data for December due on Thursday, expected to show further softening from the previous month.

Fed Chair Jerome Powell didn’t directly comment on the economic or monetary policy outlook at a forum in Stockholm on Tuesday, but he did say that “restoring price stability when inflation is high can require measures that are not popular in the short term.”

Fed Governor Michelle Bowman said she expects more interest rate increases ahead to achieve a sufficiently restrictive federal funds rate and keep it at that level for some time.

Gold edged up slightly in Asian trade to hover near an eight-month high, while oil prices fell around 1 percent after industry data showed a large build in U.S. crude stockpiles.

U.S. stocks settled on a firm note overnight after Fed Chair Jerome Powell refrained from commenting on rate policy at a symposium.

The Dow rose 0.6 percent and the S&P 500 added 0.7 percent while the tech-heavy Nasdaq Composite climbed 1 percent to extend its winning streak for a third day.

European stocks closed lower on Tuesday on U.S. rate hike woes. The pan European STOXX 600 dropped 0.6 percent.

The German DAX slipped 0.1 percent, France’s CAC 40 index shed 0.6 percent and the U.K.’s FTSE 100 eased 0.4 percent.

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