50% Off! Beat the market in 2025 with InvestingProCLAIM SALE

European stocks lower; caution ahead of Powell speech

Published 01/10/2023, 05:26 PM
© Reuters.
EUR/USD
-
UK100
-
XAU/USD
-
FCHI
-
DE40
-
GS
-
BMWG
-
GC
-
LCO
-
CL
-

By Peter Nurse

Investing.com - European stock markets fell Tuesday, with investors taking a cautious stance ahead of a widely-anticipated speech by Federal Reserve Chair Jerome Powell.

At 04:05 ET (09:05 GMT), the DAX index in Germany traded 0.6% lower, the CAC 40 in France fell 0.7% and the FTSE 100 in the U.K. dropped 0.3%.

Economic data out of Europe has been relatively strong of late, raising hopes that the Eurozone will only suffer a shallow recession in the new year, overturning earlier fears of a severe slowdown.

In fact, Goldman Sachs is no longer predicting a Eurozone recession after the economy proved more resilient at the end of 2022, seeing the region’s gross domestic product increasing 0.6% this year, compared with an earlier forecast for a contraction of 0.1%.

The positive data continued Tuesday, as U.K. retail sales rose 6.5% last month compared with a year earlier, according to numbers from the British Retail Consortium and KPMG.

French industrial production rose 2.0% on the month in November, stronger growth than the 0.8% expected, and a considerable improvement from the revised fall of 2.5% the prior month.

However, investors are showing caution ahead of a speech by Fed boss Powell later in the session, as they seek more clarity on the pace of future U.S. rate hikes.

Aggressive monetary tightening by the Fed has prompted fears of a recession in the U.S., which would weigh heavily on the global market given the importance of the largest economy in the world.

In corporate news, BMW (ETR:BMWG) stock rose 0.6% after the German auto giant said its brand delivered 2.1 million vehicles in 2022, down 5.1% from the previous year, but still maintained its number one position in the global premium segment.

Oil prices fell Tuesday, handing back some of the previous session’s gains on fears that further interest rate hikes in the U.S., the largest consumer of crude in the world, would curb demand.

Industry group American Petroleum Institute is scheduled to release its weekly data on U.S. crude inventories later in the session, while the Energy Information Administration, the statistical arm of the U.S. Department of Energy, is also due to release its short-term energy outlook.

By 04:05 ET, U.S. crude futures traded 0.5% lower at $74.27 a barrel, while the Brent contract fell 0.7% to $79.11.

Both benchmarks climbed 1% on Monday, after China, the world's biggest oil importer and second-largest consumer, opened its borders over the weekend for the first time in three years.

Additionally, gold futures rose 0.2% to $1,880.70/oz, while EUR/USD rose 0.1% to 1.0732.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.