European stock markets fell on Wednesday as investors weighed concerns about US monetary policy and the spread of the coronavirus, which prompted the region’s markets to experience their biggest decline since September.
The regional Stoxx Europe 600 index was flat, while the London FTSE 100 index rose 0.2%. The French Cac 40 index fell 0.3%, and the German Dax index fell 0.8%. Futures tracking the Wall Street S&P 500 index fell 0.3%, and futures tracking the Nasdaq 100 index fell 0.4%.
Earlier this week, US Federal Reserve Chairman Joe Biden nominated Jay Powell for a second term. This shocked the US government bond market and led to lower short-term debt prices. The move spread to the stock market. Following the slight volatility on Wall Street the day before, the Stoxx 600 Index fell 1.3% on Tuesday.
Investors’ concerns are focused on the anticipation that Powell may take a more radical approach than Lael Brainard (Lael Brainard) to control stimulus measures during the crisis, who is seen as the main competitor for the position.
The strong US labor market report shows that the number of first-time jobless claims has dropped since Late 1960s Last week, this sentiment may have been exacerbated. The October core personal consumption expenditure price index (the Fed’s preferred inflation indicator) data will be released in the morning in New York.
The consumer price index, another inflation indicator, rose at the fastest rate in October Annual rate According to data released this month, within three years.
Roger Lee, head of UK equity strategy at Investec, said: “We are now in an environment where the market debate has turned to how high inflation will reach and what the Fed’s response is.” “This is what most people in the stock and fixed income markets have never engaged in. Past work.”
Prior to the release of the PCE, the US and European government bond markets were basically stable. The U.S. 10-year U.S. Treasury bond yield was flat at 1.66%, while the German equivalent yield was flat at minus 0.22%.
Elsewhere, the Bank of New Zealand on Wednesday Interest rate hike 0.25 Percentage point to 0.75%, the move is aimed at cooling the economy and curbing rising housing prices.
After raising interest rates for the second time in two months, the Reserve Bank of New Zealand also issued strong guidance on future trends, saying that interest rates may need to rise above the neutral level.
In Asia, the Hong Kong Hang Seng Index rose 0.1%, and the Shanghai CSI 300 Index was flat.
Oil prices fell after rising earlier, and Brent crude oil fell 0.2% to US$82.11 per barrel. President Biden authorized the release of 50 million barrels of oil on Tuesday – U.S. oil consumption is about 2.5 days -Attempt to reduce the price of gasoline for consumers.