Kevin Buckland looks ahead to European and global markets
European traders may want to brace for Friday's decline as stock markets around Asia slide as investors adjust to the prospect of slower and less frequent Fed rate cuts this year.
The more than 1% decline in markets such as Hong Kong and South Korea was much larger than Thursday's 0.3% decline in the overall Wall Street index, but tech stocks sensitive to interest rate expectations continued to be at the center of the decline.
For example, in Japan's Nikkei 225 average, the technology sector was the only one that fell, but its heavy weight in semiconductor giants was enough for the index to fall by 0.3%.
Of course, there is room for decline in most of these markets, such as Asia, Europe, and the US, and many are just below their all-time highs.
There is little to distract from speculation about when the Fed will cut interest rates during Europe Day, with CPI readings from countries like France and Italy being the most watched items.
The US producer price index rose overnight as consumer inflation rose above consensus, discouraging expectations for a June interest rate cut from the Federal Reserve. The Fed's dot plot at the end of next Wednesday's policy meeting is now critical to guessing how cautious Chairman Jay Powell and his team will be.
The Bank of England, like the Swiss National Bank, will decide on policy next Thursday.
But perhaps the major monetary policy event is the two-day Bank of Japan meeting ending on Tuesday, raising speculation that at least some of the ultra-loose stimulus could end.
If Japan's largest trade union, Rengo, announces the results of its annual wage negotiations with workers in the early hours of today's Europe Day, it could even seal a hike from negative interest rates, so far All signs point to significant wage increases.
Key developments that may impact the market on Friday:
-Japanese wage negotiation announcement
-France, Italy final CPI (February)
-ECB Chief Economist Philip Lane speaks at Imperial College Business School in London
(Edited by Sam Holmes)
