On Tuesday, global market attention shifts from Paris to Capitol Hill as Federal Reserve Chair Jerome Powell prepares to testify before the U.S. Congress. The week started with political surprises, including the unexpected success of France’s leftist New Popular Front alliance in the election, prompting concerns about a hung parliament and causing French stocks to fall 0.6%. Meanwhile, the pan-European STOXX 600 index remained relatively stable.
The euro experienced volatility, initially reaching a multi-week high against the dollar before declining. In the U.S., President Joe Biden faced political pressure to withdraw from the presidential race following a weak debate performance, but he remained firm on continuing his campaign. Despite these political uncertainties, both the benchmark U.S. S&P 500 stock index and MSCI’s all-country index hit record highs on Monday.
Japan’s Nikkei recorded a new intraday high before closing down 0.3%. In contrast, mainland China and Hong Kong stocks experienced declines, with the CSI300 index dropping 0.85% for the fifth consecutive session.
Powell’s testimony, a key event for investors, will focus on the Fed’s monetary policy as he appears before the Senate Banking Committee. With market expectations leaning towards a rate cut in September, Powell’s comments will be closely scrutinized for clues. Last week in Portugal, Powell indicated the need for more data to confirm inflation moderation, with Thursday’s consumer price index report being a pivotal indicator.
Key developments to watch on Tuesday include Taiwan’s import/export data for June, Australia’s business confidence figures, and Powell’s Senate testimony.
(Reporting by Lewis Krauskopf; Editing by Josie Kao)
Original Story https://www.livemint.com/news/all-eyes-on-powell-11720475249937.html
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