Europe open: Stocks slip on hawkish Fed talk, UBS jumps

by | Aug 11, 2023

(Sharecast News) – European stocks started the session modestly lower, responding to hawkish remarks from a top U.S. central bank official overnight that served to pull Wall Street off its intra-day highs and to a nearly flat finish.
In the wake of slightly softer then expected consumer prices data in the U.S., stocks had initially jumped but according to the head of the San Francisco Fed, Mary Daly, the monetary authority still had more to do.

“This failure to hang onto the gains of the day speaks to how nervous investors are when it comes to the outlook for inflation at a time, even though Daly isn’t a voting member on the FOMC this year, and she’s hardly likely to say anything else,” said Michael Hewson, chief market analyst at CMC Markets UK.

Against that backdrop, as of 0810 BST the pan-European Stoxx 600 was slipping by 0.44% to 462.20.

In parallel, the French Cac-40 was down by 0.48% to 7,398.24 and Germany’s Dax by 0.29% to 15,950.22.

On a more positive note, reports indicated that Beijing would allow provincial governments to raise funds to pay down the debt of local government financing vehicles.

Still ahead for later in the day, at 1330 BST was producer price data out of the U.S. covering the month of July and the results of the University of Michigan’s consumer confidence survey at 1500 BST.

UBS was the top gainer on the Stoxx 600, jumping 6% after ending the Swiss government’s $10bn backstop for the stricken investment bank.

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