Prior to Powell, Tech Stocks Led Gains in US Futures – Europe Market Wrap

Tech stocks led the increase in US market futures as traders awaited words from Fed’s Powell on the outlook for interest rates.

The Nasdaq 100 index contracts rose 0.6%, boosted by favourable earnings news from the sector. S&P 500 futures crept higher after the benchmark set its 55th record high of the year on Tuesday. The Dollar strengthened, and 10-year Treasury yields rose.

French markets remained generally calm prior to Wednesday’s no-confidence vote, which threatens to topple the government. South Korea’s Won recovered after President Yoon Suk Yeol reversed his unexpected declaration of martial law. Investors are waiting to see what happens next after the opposition Democratic Party announced that Yoon will face treason and impeachment accusations for improperly imposing martial law. The Bank of Korea stated that it will expand short-term liquidity and take “active” measures in currency markets as needed to maintain stability.

In France, the CAC 40 stock index gained, outperforming Europe’s regional Stoxx 600 measure, although the yield premium on French bonds over German counterparts remained stable. The Euro weakened marginally.

Oil prices have stabilised following the largest gain in more than two weeks. Gold stabilised after gaining on Tuesday as political instability in South Korea and France boosted demand for safe-haven assets.

BoE’s Bailey sees four UK interest-rate cuts next year according to Financial Times, whilst OECD sees increasing growth risks from rising trade tensions and protectionism. ECB’s Holzmann stated that there could be a possible 25 bps rate cut in December, but no further.