European stocks fell at the open on Thursday as investors eagerly awaited the release of crucial economic data that will help determine whether the Federal Reserve will tackle persistent inflation with faster and higher interest rate hikes. .
The region-wide Stoxx 600 fell 0.4%, Germany’s Dax 0.1% and France’s Cac 40 0.4%. London’s FTSE 100 lost 0.6%.
At a two-day hearing in Washington, Federal Reserve Chairman Jay Powell said the U.S. central bank was open to returning to more aggressive interest rate hikes, but stressed that “no decision” had not yet been made.
Stock and bond markets started rising by half a percentage point in March, but are awaiting critical economic data like Friday’s nonfarm payrolls figures, which will reveal whether the economy has begun to calm.
In January, an unexpected 517,000 jobs were added, raising investor concern about the scale of rate hikes and the Federal Reserve’s hawkish rhetoric.
“Good macro news equals bad market news,” said Florian Ielpo, head of macro and multi-asset portfolio manager at Lombard Odier Investment Managers. He added that a high figure “will confirm that more needs to be done to curb the dynamism of the labor market. The reason we saw big numbers last month was because of job creation in services, which is slower to respond than manufacturing. When it will be hard to say.
US futures for the blue-chip S&P 500 fell 0.3%, while those that track the Nasdaq fell 0.5%.
Yields on two-year US Treasuries, which are more sensitive to monetary policy, fell 0.02 percentage points to 5%, while 10-year bonds rose 0.01 percentage points to 3.99%. Yields on German 10-year Bunds rose 0.05 percentage points to 2.68%.
The dollar index, which measures the greenback against a basket of six comparable currencies, fell 0.2%.
In Asia, markets were subdued, with Hong Kong’s Hang Seng Index falling 0.6% and China’s CSI 300 0.4%. This follows weaker than expected Chinese inflation data, with consumer prices up 1% and producer prices down 1.4% – its lowest level since November 2020.
In commodities, Brent crude fell 0.3% to $82.40 while WTI, the US equivalent, fell 0.4% to $76.37.