European markets are expected to fall into the red Wednesday, as rising yields in the U.S. offset excitement surrounding corporate earnings.
Global markets have been jittery over the last 24 hours, after the U.S. 10-year Treasury yield topped 3 percent on Tuesday — the first time it has done in more than four years.
Investors around the world have been fixated on the 10-year note, with concerns looming that hitting the 3 percent barrier could trigger a reaction from financial markets both in the U.S. and internationally. Investors have also been selling Treasurys in April amid expectations of rising inflation, which could push the U.S. central bank to tighten monetary policy faster.
Consequently markets have come under severe pressure after this psychological level was cracked, with the Dow sinking more than 400 points by the U.S. close on Tuesday, and markets in Asia tumbling on Wednesday.
Aside from moves in the bond market, Wednesday’s session will be filled with a brand-new batch of corporate earnings.
Novozymes, Valeo, Dassault Systemes, Linde, Deutsche Boerse, Norsk Hydro, GSK, Fresnillo, Antofagasta, Persimmon, and Whitbread are just a handful of businesses slated to publish their latest financial updates. Statoil and Credit Suisse have both released earnings before the market open.
Sticking with the corporate space, the board of biotech firm Shire has announced that it had received a revised acquisition proposal of £46 billion ($64 billion) from Takeda Pharmaceutical Company. In a statement, the Irish group said it was willing to recommend this revised offer to its shareholders.
Looking to politics, President Donald Trump and French President Emmanuel Macron vowed to strive for stronger measures on Iran, in regards to the nuclear deal established in 2015. The U.S. leader also revealed on Tuesday that NAFTA talks could be agreed on quickly, and showed positivity on the country’s relationship with North Korea, saying that the Asian leader Kim Jong Un had been “very honorable” and wanted to hold a summit soon; Reuters reported.
Investors will also be keeping a close eye on oil, after Brent crude hit its highest since late 2014 earlier this week. Oil prices have since come off those highs, but remain relatively stable.
No major economic data out of Europe are scheduled for Wednesday’s session.