European stocks fall ahead of US inflation data

Following Wednesday’s fall in Asian markets, the European stock market sent a stronger-than-expected rate hike to the Federal Reserve as traders nervously waited for the release of closely monitored U.S. inflation data. They are likely to put pressure on you to continue.

The Stoxx 600 across the region fell 0.2%, Germany’s Dax fell 0.3% and London’s FTSE 100 fell 0.1%. In Asia, Hong Kong’s Hang Seng Index fell 0.6% and China’s CSI 300 fell 0.8%.

The decline preceded the latest Bureau of Labor Statistics inflation report, which is expected to show the CPI rose 0.4% month-on-month in April from 0.1% in March. . The annual rate of growth is expected to stabilize at 5% after peaking last June and declining for nine months in a row.

Be wary of stubborn high inflation and troubles in the local banking sector, federal reserve Last week, we raised our benchmark rate by a quarter of a percentage point to a new target range of 5-5.25%. This is his highest since mid-2007.

US futures traded slightly higher after a down day on Wall Street in the previous session. Contracts tracking benchmarks his S&P 500 and his tech-heavy Nasdaq 100 were up 0.2% and 0.1% before the New York open.

Wednesday’s CPI will be the main event, but traders are also keeping an eye on political talks on the US debt ceiling.President Joe Biden yesterday begging republicans “Take the threat of default off the table” after failing to reach a breakthrough in meetings with congressional leaders.

Mike Zigmont, head of trading at Harvest Volatility Management, said: “The debt ceiling issue is very serious, but stresses that the market has not yet reacted.” If it gets too jeopardized, the market will go crazy.If the U.S. really defaults, watch out for the following.”

ING’s FX strategist Francesco Pesole now said, “There is growing concern that there may be a real market downturn in the stock and financial markets to break the deadlock.”

In Asia, China’s imports fell the most in a year last month while exports expanded at a slower pace than expected, pushing the country’s economy down since Beijing abandoned strict zero-Covid measures in late 2022. There are growing concerns about the pace of recovery.

“China’s export slump could still progress in some form before bottoming out later this year,” said Zichun Huang, China economist at Capital Economics.

“The impact of rising interest rates in advanced economies is still lingering, and turmoil in the global banking system will tighten credit conditions and weigh on economic activity.”