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European shares and US stock futures drop as traders weigh rate rise outlook

European stocks and U.S. stock futures fell Thursday as investors considered the Federal Reserve’s move to ward off stinging inflation with particularly sharp rises in interest rates.

The Stoxx Europe 600 regional stock index, which rose on Wednesday after the European Central Bank promised a new mechanism to support the weak countries in the eurozone from rising interest rates in the bloc, fell 1.4%. The London FTSE 100 index lost 1.5%.

Future markets indicated that the US S&P 500 index would fall 1.9% in early New York deals.

The U.S. stock barometer, which fell to a bear market on Monday, was Closed 1.5% higher. On Wednesday after the Fed raised its key interest rate by 0.75 percentage points.

At a press conference following the announcement of the decision to raise credit costs by the largest amount since 1994, Fed Chairman Jay Powell said he expects an increase of 0.75 percentage points. To be relatively rare.

“But we’m pretty sure there will be no sense of relief along the way [the] FOMC meeting in July, “strategists at NatWest Markets said in a comment to clients, referring to the next time the Federal Open Market Commission will convene to determine credit costs.

NatWest predicts that the annual rate of US consumer price inflation will reach a new 40-year high of 8.9% this month, as the fallout from Russia’s invasion of Ukraine continues to raise oil and food prices.

In government debt markets, the 10-year yield on the U.S. Treasury bill, which fluctuates inversely and sets lending costs around the world, fell 0.03 percentage points to 3.37%.

In currencies, the euro fell 0.5% against the dollar to just under $ 1.04.

“This was good news for the ECB to respond,” said Nadège Dufossé, head of cross-asset strategy at Candriam Fund, in relation to the central bank’s announcement on Wednesday. But as for the design of the new support tool, That economists have already predicted“Actually we don’t see anything new.”

The pound fell 0.9 percent to just under $ 1.21 ahead of the Bank of England’s interest rate meeting on Thursday, where it is expected to raise interest rates by at least 0.25 percentage points as it balances rising consumer prices. Economic slowdown.

Asian stock markets were mixed, with the Hong Kong Hong Kong Index down 1.7% and the Japanese Topix up 0.6%.

European shares and US stock futures drop as traders weigh rate rise outlook Source link European shares and US stock futures drop as traders weigh rate rise outlook

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