Fed hawkish comments, new sanctions on Russia

LONDON — European markets are set to open lower on Wednesday amid hawkish comments from U.S. Federal Reserve officials and new sanctions on Russia.

Britain’s FTSE 100 is seen down around 30 points to 7,584, Germany’s DAX is set to drop around 59 points to 14,365 and France’s CAC 40 is set to fall around 28 points to 6,618, data showed. ‘ig.

Fed Governor Lael Brainard said during a Fed webinar in Minneapolis on Tuesday night that the central bank will need to shrink its balance sheet quickly and continue to raise interest rates at a steady pace in order to contain the surge. of inflation. The comments pushed major US averages and the 10-year Treasury yield down to a new high in 2022.

San Francisco Fed President Mary Daly later told the Native American Finance Officers Association that inflation at its highest level in 40 years was “as bad as not having a job” and assured to the group that the Fed was ready to act.

Global investors are also awaiting details of new international sanctions against Russia after allegations of civilian killings emerged in Ukrainian towns now recaptured from Russian forces. The European Commission proposed on Tuesday to ban Russian coal as part of its next round of sanctions.

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U.S. equity futures were flat in early premarket trading as U.S. investors awaited the release of Tuesday’s Fed meeting minutes, hoping for more details on the Federal Open Market Committee’s plan to shrink the central bank’s balance sheet.

Asia-Pacific stocks fell on Wednesday, following overnight losses on Wall Street with Chinese tech stocks in Hong Kong falling sharply.

UBS holds its annual general meeting on Wednesday while on the data front, Eurozone construction PMI readings for March and February retail sales are due.

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