European stocks opened higher before turning mixed on Thursday after one of the worst selloffs this year. Wall Street stocks closed lower and Treasury yields rose overnight as minutes showed Federal Reserve officials were cautiously optimistic about the U.S. recovery at their April meeting. Of note, some officials signaled they’d be open at some point to discussing scaling back the central bank’s bond purchases. Today in Asia, the Nikkei 225 regained lost ground, edging 0.2% higher after the government reported that exports rose 38% in April from a year earlier while imports climbed nearly 13%.
Elsewhere, the European Central Bank executive board member Isabel Schnabel said today that the surge in Eurozone inflation is temporary and the prices should decelerate next year, suggesting they will keep financing conditions favorable in order to support the economy. He also added that there is no reason for an interest rate hike at the moment.
Meanwhile, Germany’s Economy Minister Peter Altmaier said the European Union (EU) will discuss a dispute over steel and aluminum tariffs with US officials when they meet in Brussels later today. He highlighted that they have the opportunity to create a new basis for global trade politics with the new U.S. administration. Earlier, the European Commission announced that they will not impose retaliatory tariffs on more US products.
Against this backdrop, the UK FTSE 100 sheds 0.14% to 6,940, Italy’s FTSE MIB loses 0.01% to 24,486, France’s CAC 40 is up by 0.18% to 6,273, while the German DAX 30 rises by 0.02% to 15,117. US stock index futures are little changed ahead of the opening bell on Wall Street.
In currencies, the greenback rose sharply as the Federal Reserve delivered a hawkish hint on the outlook for its monetary policy. EURUSD dipped from fresh multi-week highs around 1.2245 down to 1.2170. The pair managed to bounce but struggled below 1.2200 during the European hours. it looks like the pair could spend some time in consolidation before deciding on the further direction in the short term. Later in the day, US jobless claims data could affect USD-pairs including EURUSD.
Nathan Lambert, Head of Global FX Analytical Department