European Equities Mixed as US Fed Chair Downplays Stagflation Risks

Strategic Insights -

US Federal Reserve Chair Jerome Powell dismissed the prospect of stagflation, a period of slow economic growth and high inflation, in comments before the Senate Banking Committee. The statement comes as investors await data on US economic growth and initial jobless claims, while also keeping an eye on comments from Bank of England Governor Andrew Bailey. Meanwhile, President Trump stated that the war between Israel and Iran is "done" and believes US strikes destroyed enriched uranium at Iranian nuclear sites. Additional economic and company news is discussed below.

Key Takeaways:

  • The US Federal Reserve's Chair Jerome Powell stated that stagflation is not the central bank's base case, though they are monitoring conditions.
  • Powell also noted that predicting the effect of President Trump's new tariffs on inflation data is challenging.
  • President Trump believes that the US strikes against Iranian nuclear facilities destroyed enriched uranium and ended the war between Israel and Iran.
  • A report by the European Environment Agency suggests that expanding renewable energy sources could reduce electricity costs for consumers by up to 57% by 2030.
  • The UK government is introducing new procurement rules aimed at giving domestic firms an edge over foreign companies in certain sectors, such as steel and energy.
  • The UK government has launched a trade plan to boost exports and protect domestic firms.
  • Nato and South Korea have agreed to increase cooperation between their defense sectors, including establishing an industry consulting group.
  • Micron Technology delivered a beat-and-raise as robust DRAM and data centre sales drove a 37% increase in revenue year-on-year.
  • Shell has denied being in talks to acquire rival BP after speculation about a deal that would combine the UK's two biggest oil companies.
  • Meta Platforms has been handed a victory by a US judge over authors who accused the company of violating copyright law.

Statistics:

  • The US 10-year Treasury yield was at 4.27% with a change of -0.05% since the previous day.
  • The US 30-year Treasury yield was at 4.82% with a change of -0.04% since the previous day.
  • The EUR was higher against the USD at 1.1685 with a change of +0.006 since the previous day.
  • The GBP was higher against the USD at 1.3703 with a change of +0.008 since the previous day.
  • The USD was lower against the JPY at 144.91 with a change of -0.69 since the previous day.
  • GOLD was higher at USD3336.38 per ounce with a change of +1.66% since the previous day.
  • OIL (Brent) was lower at USD67.83 a barrel with a change of -1.44% since the previous day.

Sources:

  • Alliance News
  • Federal Reserve
  • European Environment Agency
  • UK Government
  • Nato
  • Micron Technology
  • Shell
  • Meta Platforms