European Shares Set For Mixed Open On Interest-rate Worries

European stocks are seen opening on a mixed note Monday as investors react to central banks’ hawkish rhetoric and concerns over a global economic slowdown.

Meanwhile, French President Emmanuel Macron’s centrist grouping has lost its absolute majority in parliament, raising concerns over Macron’s ability to pursue further reform of the euro zone’s second biggest economy.

Gold edged lower and London copper prices fell to an eight-and-a-half month low, weighed down by a strong dollar after Federal Reserve Governor Christopher Waller on Saturday said he would support another 75-basis-point rate increase at the central bank’s July meeting.

Separately, Cleveland Fed chief Loretta Mester said that it would take two years for inflation to fall to the central bank’s two percent target.

Fed Chair Jerome Powell will testify to the House on Wednesday and Thursday, with analysts expecting him to reiterate his commitment to fight inflation with aggressive rate hikes if needed.

U.S. Treasury Secretary Janet Yellen on Sunday said she expects the economy to slow, but she doesn’t think a recession is at all inevitable.

Asian markets traded lower, with Chinese shares bucking the weak trend after the People’s Bank of China held its benchmark rates unchanged.

Investors were also reacting to reports that the White House is considering removing some tariffs on China and a possible pause on the federal gas tax to fight inflation.

U.S. stocks ended a volatile session mixed on Friday, suffering their biggest weekly percentage decline in two years.

The tech-heavy Nasdaq Composite climbed 1.4 percent and the S&P 500 edged up 0.2 percent as four types of futures and options contracts expired.

The Dow slipped 0.1 percent to close at its lowest level since December 2020 as disappointing reports on industrial production and leading economic indicators added to signs of economic slowdown.

European stocks also ended mixed on Friday after data showed Eurozone inflation accelerated to a fresh record high in May.

The pan European Stoxx 600 ended little changed with a positive bias. The German DAX rose 0.7 percent, while France’s CAC 40 index finished marginally lower and the U.K.’s FTSE 100 dipped 0.4 percent.

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