European stock markets are expected to open slightly higher after Jerome Powell's restrictive remarks. The Eurostoxx 50 opened at 3,741.51 points (+1.52%), the CAC 40 at 6,430.19 points (+1.30%), the DAX 40 at 14,185.94 points (+1.59%), the FTSE 100 at 7,518.35 points (+0.72%), the SMI at 11,730.44 points (+0.50%), the DJIA at 32,654.59 points (+1.34%), the Nasdaq at 11,984.52 points (+2.76%), the S&P 500 at 4,088.85 points (+2.02%) and the Nikkei 225 at 26,834.90 points (+0.66%).
Regarding exchange rates, the change from the close in New York indicates that EUR/USD at 1.0535 (-0.17%), EUR/JPY at 135.91 (-0.43%) and USD/JPY at 129.04 (-0.25%).
European equity markets may struggle to find momentum on Wednesday, after the Federal Reserve (Fed) chairman said he was confident in the U.S. economy's ability to withstand a less accommodative monetary policy. but acknowledged that interest rate hikes could dampen hiring. At 7:35 a.m., the CAC 40 futures contract gained 17 points, or 0.3%, according to data from broker IG Markets. The contract on the DAX 40 took 26 points, or 0.2%, and the ftse 100 contract gained 5.7 points, or 0.08%.
Against this backdrop, Wall Street ended sharply higher on Tuesday, buoyed by favorable retail sales figures in April. The Dow Jones Index (DJIA) rose 1.3% to 32,654.59 points, and the broader S&P 500 Index rose 2% to 4,088 points. The Nasdaq Composite gained 2.8% to 11,984.52 points. Investors will remain alert on Wednesday to the evolution of inflation, with the consumer price indices of the United Kingdom and the euro zone. In Asia, markets are trading in scattered order on Wednesday. At the end of the session, the Nikkei index gained 0.7% in Tokyo. Hong Kong's Hang Seng Index lost 0.4% and shanghai Composite Index lost 0.3%
U.S. Treasury yields hit their highest level in at least a week on Tuesday after the release of April U.S. retail sales, which showed consumption remained strong, and the Fed chairman's remarks, who said a "rather soft landing" of the economy was plausible.
The euro fell on Wednesday morning against the dollar. The resurgence of risk aversion in the markets supports the greenback's attractiveness as a safe haven. According to Westpac, it is still far too early to talk about a long-term peak for the dollar and any decline in the greenback should be little marked.
Oil contracts are gaining ground on Wednesday morning, buoyed by some optimism about fuel demand in China, with Shanghai not recording a new case of Covid-19, outside quarantine zones, for the third day in a row. At 7:25 a.m., the July Contract for North Sea Brent gained 57 cents to $112.50 a barrel. The June light crude (WTI) on Nymex-listed light crude was up $1.17 to $113.57 a barrel.