European markets opened lower on Thursday, extending the losses recorded in the previous session, following Jerome Powell’s speech. Yesterday’s decline on stocks took place after investors were strongly disappointed by the tone of the Chairman of the Federal Reserve during the press conference, as the central banker gave mixed signals regarding the next policy moves. The FOMC delivered its expected 25 basis point rate cut but Powell’s speech was surprising hawkish as he left all options open for the Fed: from further rate cuts to another rate hike cycle. In theory, a hawkish central banker should reassure investors about the strength of the economy, however, lingering problems related to the current US-China trade war are a concern for many.
With the FED out of the way, traders will now focus on tomorrow’s U.S. job report and in Europe, investors will pay attention to the BoE’s policy decision due today as everybody wonders how Mark Carney is going to react to the pressure on the Pound due to rising economic and political uncertainty. The FTSE-100 stopped its decline after having found a strong technical support over 7,475.0pts but volatility spikes may take place this afternoon during Carney’s speech.
