Fed meeting approaches European stock markets fall

Fed meeting approaches European stock markets fall



Stock update

European stock markets retreated from their all-time highs set on Friday as investors became cautious ahead of the Federal Reserve’s latest monetary policy decision on Wednesday.

The Stoxx Europe 600 index fell 0.4% in early trading, after Asia fell due to the blow to Chinese education companies and concerns that the US central bank was close to controlling its asset purchases during the pandemic. The London FTSE 100 Index fell 0.5%.

Since March last year, the Fed has purchased $120 billion in bonds every month to support the deep recovery of the economy from the pandemic, lower the yields of government debt and other credit instruments, and boost the attractiveness of the stock market.

Economists generally expect that at the end of this week’s meeting, Fed Chairman Jay Powell will not provide any hard guidance on when to cut the bond purchase plan.But when the Fed officials began to disagree Steering taper After U.S. consumer price inflation accelerate It reached 5.4% in the 12 months ending in June.

“Minutes of the meeting up to June [Federal Reserve] Fed officials’ meetings and remarks show that there are differences among members on the timing, speed and composition of the reduction,” said Tom Kenny, economist at ANZ Bank.

St. Louis Fed President James Brad Tell The Wall Street Journal said earlier this month that “now is the time” to withdraw monetary stimulus measures. Robert Kaplan of the Dallas Federal Reserve also strongly advocates reducing stimulus measures.

However, as Asian stock markets fell sharply, government bond prices rose on Monday. After the Beijing government banned academic tuition groups over the weekend, China’s CSI 300 Index fell 3.2% Profit from, Raise funds or go public.

Suppression followed A commotion Antitrust and other measures against Chinese technology companies, including ride-hailing app Didi Chuxing And e-commerce group Alibaba. Hong Kong’s Hang Seng Index fell 3.7%, and South Korea’s Kospi 200 Index fell 1%.

The yield on the benchmark 10-year U.S. Treasury bond is inversely proportional to its price, down 0.05 percentage points to 1.238%. The German equivalent of German government bond yields fell 0.02 percentage points to minus 0.435%.

Despite rising inflation and Fed officials last month advanced the forecast of the first interest rate hike after the pandemic to 2023, analysts were surprised that the benchmark Treasury bond yield fell rapidly from nearly 1.8% in March.

Some have accused traders of repurchasing U.S. Treasuries after liquidating Fed Powell’s wrongly overly aggressive short position insist High inflation is the temporary effect of the economy’s reopening after it closed last year.

Others said that the U.S. Treasury bond market is still concerned about the threat of the highly spread Coronavirus Delta variant to economic growth.

Jefferies’ strategists wrote in a research report: “The U.S. Treasury market has been sending out signals of a general growth panic, despite the “complete lack of evidence of growth collapse”.

In terms of currency, the euro was flat against the US dollar, buying 1.1776 US dollars, which hit its lowest point since early April last week due to a signal from the European Central Bank Will keep Seriously negative interest rates. The pound rose 0.1% to 1.3762 US dollars. The U.S. dollar index, which reflects the trend of the U.S. dollar against major currencies, fell 0.1%.

The international oil benchmark Brent crude fell 1.8% to US$72.76 per barrel.


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