Pressures on euro markets in the shadow of the US

With sharp losses that exceed 1%, the main European indices move at the beginning of the week, against the background of the general deterioration of the investment climate internationally in the wake of Powell’s speech on Friday.

In particular, the pan-European index Stoxx 600 makes losses 0.8% and retreats to 422.58 units, just like o Stoxx 50 of the high cap that moves down 1.2% to 3,560 units.

The picture is similar in the individual European boards, where in Germany the DAX loses 1% and is at 12,837 units, like the French one CAC 40 which recedes against 1.05% to 6,207 units.

The European region is moving at the same pace as the Italian one FTSE MIB at 21,750 units with -0.7% and Spanish IBEX 35 at 7,956 units with -1.2%while the UK FTSE 100 remains closed today due to a bank holiday.

In a development that appears to be shaping the course of markets not only in the US but globally, Fed chief Jay Powell, in his much-anticipated speech at the annual symposium of the world’s most powerful central bank in Jackson Hole, appeared determined to fight at all costs the skyrocketing inflation suggesting the Fed will continue its aggressive rate hikes.

The Fed chairman’s reference to the “economic pain” expected as the bank tries to control the course of prices in the US effectively eliminated expectations of a shift in the Bank’s dovish stance in the near future, sending the Wall deep into the red Street initially and the markets worldwide afterwards as the dashboards in Europe and Asia show today.

Significantly, Fed rate futures, from where they were split between 50 and 75 basis points on the size of the Fed’s next rate hike in September, now point clearly towards a third consecutive 75m range. .b with more than 70% probabilities.

Indicative of the impact of Powell’s remarks, the Dow Jones plunged 1,000 points on Wall Street on Friday and the broader S&P 500 lost about 3.4%.

ECB officials now seem to be on a similar wavelength with the Fed, with Latvian central banker Martin Kazaks stating that the Bank should discuss an interest rate increase between 50 and 75 bps. in September, while French counterpart Villeroy de Gallo confirmed that a “significant” rate hike was needed.

In this climate, investors’ attention is expected to turn at noon to Germany, where the data on inflation in the country is published.

Earlier today, major indexes in Asia were down more than 2% as investors also weighed in on Powell’s speech.