European Markets Weak On Global Policy Threat
German and French stocks have broadly softened. DAX declined 1.00% to 12,277 pts. The CAC index is down 0.72%. Such a volatility was caused by continuous political turmoil. The news came out today, suggesting that Syrian forces allegedly used chemical weapons against rebel positions last week. The United Nations Security Council meeting didn’t see the consensus as Russia put a veto on a US offer to investigate the attack. Donald Trump claimed that the US is ready to react and so responded Russia.
Before the news, the sentiment was buoyed as Chinese President Xi Jinping took a rather peaceful stance in the “US-China trade tension” case. In his speech, the President hardly mention the situation and tried not to make any provocative comments about it. Jinping also expressed his commitment to global multilateral framework like G20, APEC and promised to open up China markets to foreign investments. That will suggest reduced tariffs for autos, increased intellectual property protection and enforced investment protections for foreign businesses.
Today, Mario Draghi will deliver a speech at economic event in Frankfurt. The US will release Headline Consumer Price Index and Core Consumer Price Index. Additionally, Fed will issue the protocol of its March policy meeting. Investors are hoping to get some information about the number of rate hikes this year. So far, Fed prognosis suggests 3 hikes, but some members insist there would be 4. Fed fund futures are pricing in 95% odds for a rate lift of 25 basis points in June. Tomorrow, the European Central Bank will publish the protocol of its recent meeting and the US will announce jobless claims.