European Stocks Waver – Europe Market Wrap

US share futures fell as investors were more convinced that the Federal Reserve will keep interest rates higher for longer in order to temper a strong economy. Some even began to predict that an increase in interest rates would be the next move.

Futures on the S&P 500 and Nasdaq 100 indicated a lower day when Wall Street reopened after Monday’s public holiday. Nvidia fell in pre-market trade ahead of its highly anticipated earnings report on Wednesday. The 10-yr Treasury yield and the dollar remained stable.

Traders have recently shifted rate-cut expectations from March to June, as a phalanx of Federal Reserve officials warned against overly optimistic expectations of policy easing, while economic data has continued to surprise to the upside.

The STOXX Europe 600 index fell, putting an end to a four-day rally that had brought it within two points of its January 2022 record high on Monday. European bonds advanced, with Germany’s 10-Yr yield decreasing by almost four basis points.

Goldman Sachs expects the BoE to start cutting interest rates in June vs prior forecast of May.

BoE Governor Andrew Bailey: Cutting rates possible before inflation hits target.