As Attention Turns to Warsh, Stocks Decline & Dollar Rises – Europe Market Wrap
Attention is firmly on Warsh’s appearance at the ECB’s Sintra forum, where investors will look for further guidance on the Fed’s policy path after his recent commitment to restoring price stability boosted the Dollar and front-end Treasury yields. Markets are also turning their focus toward persistent inflation pressures and Thursday’s US payrolls report, with traders assigning roughly a one-in-three chance of a Fed rate hike this month.
In commodities, Brent crude fell 0.8% to around $72.30 a barrel after US officials said negotiations with Iran are progressing, raising hopes that an interim peace agreement could evolve into a permanent settlement.
In Europe, government bonds largely held onto earlier losses despite Euro-area inflation cooling by more than expected. Money markets continue to price a greater than 50% probability of an ECB rate hike by September, with a full 25 bps increase largely priced in by year-end.
