European Shares Set For Cautious Start

European stocks may drift lower at open on Tuesday as the dollar strengthened along with Treasury yields ahead of testimony by top U.S. policymakers later in the day.

Asian markets remain broadly lower, with Chinese and Hong Kong markets pacing the declines, on persistent worries of policy tightening and escalating tensions between the world’s two largest economies over tech and trade.

Meanwhile, Beijing hit back immediately with punitive measures against several EU officials and entities after coordinated sanctions by western countries over Xinjiang abuses.

Investors now await a closely watched Congressional appearance by U.S. Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen later in the day for clues on whether they will seek to slow rising yields.

In remarks prepared for the congressional hearing, Powell said that the U.S. recovery had progressed “more quickly than generally expected and looks to be strengthening”.

Gold prices eased on dollar strength and oil retreated on concerns about near-term demand outlook while the Turkish lira showed some sign of stability after a 7.5 percent fall on Monday.

U.S. stocks ended higher overnight as Treasury yields retreated amid a slate of bond auctions and ahead of testimony by Powell and Yellen.

The Dow edged up 0.3 percent, the S&P 500 climbed 0.7 percent and the tech-heavy Nasdaq Composite rallied 1.2 percent.

European markets ended Monday’s session on a mixed note amid turmoil in the Turkish lira and concerns over rising Covid-19 cases in the region.

The pan European Stoxx 600 inched up 0.2 percent. France’s CAC 40 index eased half a percent while the German DAX and the U.K.’s FTSE 100 both rose about 0.3 percent.

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