Coin Press - Markets waver ahead of earnings, Powell speech

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Markets waver ahead of earnings, Powell speech
Markets waver ahead of earnings, Powell speech / Photo: ANGELA WEISS - AFP/File

Markets waver ahead of earnings, Powell speech

European and Asian stock markets fluctuated on Tuesday as investors trod carefully ahead of a key speech by US Federal Reserve chief Jerome Powell that could provide more hints of an interest rate cut.

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With recent data indicating the US economy remains in good shape as inflation slows and the labour market softens, there is widespread expectation the bank will finally start unwinding its long-running programme of tight monetary policy next month.

A slew of earnings from US stores Target, Lowe's and TJX are also on tap this week, providing more insight into the confidence of consumers after reassuring retail sales figures last week.

But the main focus is Powell's remarks on Friday to the annual symposium of global central bankers at Jackson Hole, Wyoming, where he could give signals about the Fed's plans for borrowing costs.

Bets have surged that officials will cut rates by 25 basis points next month -- with some even flagging 50 points -- followed by two more before the end of the year.

Powell raised hopes for a move at the bank's most recent meeting when he said it could come "as soon as" September, having previously said the policy board did not need to wait for inflation to fall to its two-percent target before reducing rates.

"All eyes and ears are tuned in, eagerly waiting to see if he'll give a wink of confirmation to the current market pricing," said independent analyst Stephen Innes.

"The market is positioning his remarks to be more consequential than usual, hoping for a dovish signal that sets the stage for the (policy board) to cut in September," he said in his Dark Side Of The Boom newsletter.

However, he added: "But don't expect Powell to spill the entire rate-cut enchilada just yet. With one more non-farm payrolls report to navigate, the decision between a 25 or 50 basis point cut in September is still up in the air, poised to be the opening act in a multi-rate-cut storyline."

San Francisco Fed chief Mary Daly told the Financial Times she had "more confidence" inflation is being tamed following recent data.

Her colleague at the Minneapolis Fed, Neel Kashkari, said in the Wall Street Journal that the prospect of a weaker labour market made talk of a reduction appropriate.

All three main indexes on Wall Street ended well up on Monday, with the S&P putting on one percent and the Nasdaq 1.4 percent.

Asian investors were a little more cautious but pushed most markets higher.

Tokyo rallied 1.8 percent, clawing back all Monday's losses, while Sydney, Seoul, Singapore, Taipei, Manila, Mumbai, Bangkok and Jakarta were also up.

However, Hong Kong and Shanghai retreated after recent advances, while Wellington also fell.

London and Frankfurt were down around midday while Paris was flat.

Gold broke to a fresh record above $2,520 on Tuesday -- a third successive day of new peaks -- on Fed rate cut bets that would make the yellow metal more attractive to investors.

Crude prices steadied after plunging Monday over growing hopes for a Gaza ceasefire as US Secretary of State Antony Blinken continues talks with regional leaders.

In company news, Tokyo-listed 7-Eleven owner Seven&i Holdings dropped more than 10 percent a day after surging almost 23 percent on news it had received a takeover bid from Canadian retail giant Alimentation Couche-Tard, the operator of Circle K.

The deal, which could be worth as much as $38.6 billion, would mark one of the biggest foreign acquisitions of a Japanese firm.

- Key figures around 1015 GMT -

London - FTSE 100: DOWN 0.7 percent at 8,299.99 points

Paris - CAC 40: FLAT at 7,505.26

Frankfurt - DAX: DOWN 0.1 percent at 18,405.79

EURO STOXX 50: UP 0.1 percent at 4,874.65

Tokyo - Nikkei 225: UP 1.8 percent at 38,062.92 (close)

Hong Kong - Hang Seng Index: DOWN 0.3 percent at 17,511.08 (close)

Shanghai - Composite: DOWN 0.9 percent at 2,866.66 (close)

New York - Dow: UP 0.6 percent at 40,896.53 (close)

Euro/dollar: DOWN at $1.1080from $1.1086 on Monday

Pound/dollar: UP at $1.3006 from $1.2989

Dollar/yen: DOWN at 146.37 yen from 146.61 yen

Euro/pound: DOWN at 85.20 pence from 85.33 pence

West Texas Intermediate: FLAT at $74.39 per barrel

Brent North Sea Crude: UP 0.2 percent at $77.82 per barrel

P.Petrenko--CPN