Powell Reloaded, German Gas Alarm, Jobless Claims

© Reuters.

By Geoffrey Smith

Investing.com — Federal Reserve Chairman Jerome Powell heads to the House for a second day of Congressional testimony as monetary tightening continues from the Philippines to Norway and, most likely, Egypt and Mexico. Germany is sounding the alarm over natural gas supplies after Russia shuts down, and the fallout from the war in Ukraine is taking an increasing toll on the French and German economies. Jobless claims must be filed, along with earnings from Accenture (NYSE:), Darden Restaurants (NYSE:), Rite Aid (NYSE:), and – after the bell – FedEx (NYSE:). And the government’s oil inventory data is being slowed down by technical issues. Here’s what you need to know in the financial markets on Thursday, June 23.

1. Powell goes back to Congress; interest rate hikes continue around the world

The Federal Reserve chairman heads to the United States House of Representatives for the second day of his regular testimony on the state of the US economy. Powell told the Senate on Wednesday that they have risen, but the central bank will still prioritize reducing the highest inflation rate in a generation.

Powell will move in minutes after the week’s update on , which has been on a slight but nevertheless clear upward trend for the past few weeks.

Elsewhere, monetary policy tightening around the world continued, with the Bank of Norway rising 50 basis points to 1.25%, ahead of expectations. The index also increased, but only by 25 basis points, while the key rate remained stable. The central banks of and are expected to rise 50 and 75 basis points respectively when they meet later.

2. Germany sounds gas alarm

reached a new quarterly high when the German natural gas supply triggered the second phase of a three-part plan to ensure security of supply.

The move formalizes other actions Berlin has already taken in recent days in response to a 60% cut in Russia’s gas supply for reasons the government sees as politically motivated. However, the government will not immediately activate a provision that would have allowed supplies to pass on price increases prior to contractually permitted adjustments.

The news comes one day when the European Union will formally invite Ukraine — or what’s left of it — to join the bloc. Russian artillery strikes have intensified over the past week, damaging two grain export terminals owned by Canadian and US companies in the port city of Mykolaiv. Ukrainian publications also reported that Russians have dismantled and removed the largest solar power plant in Ukraine, a 50-megawatt installation called TokMak.

3. Shares will open higher; Accenture, Darden, FedEx Revenue Due

US stock markets are expected to open slightly higher as investors adjust to the latest commentary on the economic outlook from Powell and others.

At 06:15 AM ET (1015 GMT), they were up 41 points, or 0.1%, while they were up 0.3% and 0.7%. All three had fallen by between 0.1% and 0.2% after Powell’s first day of testimony.

Stocks likely to be in the spotlight include Accenture and Darden Restaurants, both of which report pre-opening earnings. They provide insight into current trends in business investment and consumer spending, respectively. FedEx, a whistleblower of online shopping and the remote economy in general, reports after the shutdown.

4. European economy slows further; British midterm elections watched

Eurozone activity in June, as rising inflation and rising interest rates took a bite out of demand and the economic outlook deteriorated.

S&P Global’s June flash — which combines data from the currency bloc’s services and manufacturing sectors — fell to 51.9 points, down from 54.8 in May and below analysts’ estimates.

S&P also said the UK economy was “down” after business expectations there softened to its lowest level in nearly a year and a half. The latest in a string of weak UK data comes ahead of two by-elections later on Thursday, which are expected to see a major turnaround against the ruling Conservative Party.

5. Oil Drops After Big Rise in API Stocks, Optimistic Iranian Comments; EIA data delayed

Crude oil prices fell on bullish voices from Tehran about prospects for a deal that could lift Western sanctions, paving the way for world markets for Iranian exports.

At 6:25 AM ET, futures were down 0.8% to $105.39 a barrel, while falling 0.7% to $110.98 a barrel.

There was previously bad news for European fuel suppliers when TotalEnergies (EPA:) was forced to close its Donges refinery in France. Elsewhere, the US government said the Energy Information Administration’s weekly inventory data will be delayed due to technical issues. Parallel data from the oil and gas industry on Wednesday had shown the largest weekly increase in crude oil inventories in more than two months.

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