European Shares Set For Lower Open

European stocks may open lower on Tuesday as investors react to Federal Reserve Chair Jerome Powell’s more hawkish tone on monetary policy.

A dollar gauge advanced and Treasuries extended losses in the wake of Powell’s comments suggesting that the U.S. central bank is prepared to raise interest rates by a half percentage-point at the next policy meeting if needed.

Oil extended gains, with Brent crude prices rallying towards $120 a barrel, after Kremlin spokesman Dmitry Peskov said no agreements were reached in Ukraine negotiations.

After U.S. President Joe Biden branded Russian leader Vladimir Putin a “war criminal”, Russia said relations are “on the verge of rupture.”

Meanwhile, after having imposed hefty measures against Russia, the EU and allies will decided this week on whether and how to slap sanctions on Russia’s lucrative energy sector.

Asian markets were mostly higher after China’s cabinet pledged stronger policy support for the economy but cautioned against flooding the market with liquidity.

U.S. stocks fell overnight after Fed Chair Jerome Powell signaled openness to raising interest rates aggressively this year to tame inflation, leading to speculation of a potential 50 bps move at any of the upcoming meetings.

The Dow shed 0.6 percent and the tech-heavy Nasdaq Composite dropped 0.4 percent while the S&P 500 edged down marginally.

European stocks ended Monday’s session on a mixed note, as higher oil prices as well as reports about Omicron BA.2 fueling a massive Covid surge in parts of Europe and Asia prompted traders to cash in on last week’s gains.

The pan European Stoxx 600 closed flat with a positive bias. The German DAX and France’s CAC 40 index both fell around 0.6 percent while the U.K.’s FTSE 100 gained half a percent.

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