European stocks are poised for a firm start
(RTTNews) – European stocks are set to open higher on Thursday as China steps up monetary easing efforts to support a slowing economy.
China’s central bank cut the one-year loan prime rate (LPR) from 3.8% to 3.7% and the five-year LPR from 4.65% to 4.6%, as part of the latest initiative to stimulate its ailing economy.
Asian markets were mostly higher as investors brace for the U.S. Federal Reserve’s next policy decision, due Jan. 26.
US President Joe Biden backed central bank plans to scale back stimulus, saying controlling inflation was a key task for the Federal Reserve.
He also indicated that his $2 trillion economic program will need to be split so that a scaled-down version can be passed by Congress.
Regarding tensions between Russia and Ukraine, Biden said the United States and its European allies were united to ensure that Russia would face “serious economic consequences” if Putin attacked. He also suggested that a full-scale invasion might not be in the Russian leader’s plans.
On the Covid-19 front, World Health Organization (WHO) Director General Tedros Adhanom Ghebreyesus said the theory that Omicron could mark the end of the Covid-19 pandemic is not true and that it is far from over.
Gold held near a two-month high as easing US Treasury yields stifled dollar gains and geopolitical tensions around Ukraine boosted bullion’s appeal.
Oil prices fell in Asian trading after industry data showed U.S. crude and gasoline inventories rose last week.
In economic releases, final Eurozone inflation figures for December, German headline inflation data and US reports on weekly unemployment insurance claims and manufacturing from the Philadelphia Fed will be probably the main concern.
U.S. stocks ended in the red for the second straight session on Wednesday after U.S. Treasury yields hit new two-year highs amid Fed rate hike expectations.
The Dow and S&P 500 fell about 1% each, while the tech-heavy Nasdaq Composite lost 1.2% to close in correction territory for the first time since last March.
European stocks closed slightly higher on Wednesday as investors grappled with the Covid-19 pandemic and the prospect of higher interest rates.
The pan-European Stoxx 600 index gained 0.2%. Germany’s DAX edged up 0.2%, France’s CAC 40 index rose 0.6% and the UK’s FTSE 100 added 0.4%.
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