Markets.com Logo

Eurozone bank shares slip further on weak yields, eyes on Fed speeches

2 min read

Eurozone bank shares are amongst the worst performing today. The sector has fallen 1% overall, greatly outpacing the wider market dip.
 

The biggest movers include Sabadell, with losses in the region of 1.1%, Credit Agricole, off 1.5%, UBI Banca, down 1.7%, and ABN Amro, also down 1.7%.

The sector has been hit by weak Eurozone government bond yields, which are currently hovering just above record lows. The German 10-year bund currently yields -0.311%. That’s just above the -0.329% record low seen last Tuesday.

All eyes are back on the Federal Reserve ahead of a set of speeches, including one from chair Jerome Powell during the US session.
 

Federal Open Market Committee members signalled after last week’s policy meeting that a rate cut was on the way. This wasn’t enough for President Donald Trump, who responded that the Fed “blew it”. The President called a few months ago for 100 basis points of cuts and the reintroduction of quantitative easing.

Markets are waiting to see whether the Fed will bow to pressure and crank up the dovish rhetoric. President Jerome Powell has so far had little time for the President’s attempts to intervene. But with market expectations racing way ahead of what the data and policymakers themselves would suggest is necessary and a President intent on getting a weaker dollar to help him in his trade battle with China, can the Fed afford to go at its own pace?

Elsewhere stocks were holding near opening levels, with losses capped by the merger of two of the biggest business consultancies in Europe. The deal sees Capgemini purchasing Altran for €3.6 billion. Shares of Capgemini are up 7% to trade at a 2-month high, while Altran shares, reflecting the selling price, have shot up 21%.


Risk Warning: this article represents only the author’s views and is for reference only. It does not constitute investment advice or financial guidance, nor does it represent the stance of the Markets.com platform.When considering shares, indices, forex (foreign exchange) and commodities for trading and price predictions, remember that trading CFDs involves a significant degree of risk and could result in capital loss.Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice. Trading cryptocurrency CFDs and spread bets is restricted for all UK retail clients. 

Related Articles