In This Article:
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Yen near 15-yr low on rising euro, intervention a risk
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Gold touches 4-month low
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Upbeat US data, hawkish ECB fuels rate speculation
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Tech stocks hit by report US to limit AI chips for China
(Adds quote in paragraph 4, refocuses paragraph 1,2 to US and updates pricing throughout)
By Nell Mackenzie
LONDON June 28 (Reuters) -
U.S. stocks were poised to open lower on Wednesday pressured by reports of a possible curb on U.S. tech exports to China, while investors awaited comments from Federal Reserve Chair Jerome Powell to gauge the path for interest rates.
Shares of chip companies Nvidia fell as much as 4.6% in premarket trading, while Advanced Micro Devices dipped 3.5% after the Wall Street Journal reported the Commerce Department was mulling stopping shipments of artificial intelligence (AI) chips made by these companies to China as early as July.
Treasury yields inched higher on the strength of U.S. data, combined with hawkish commentary emerging from Portugal at a gathering of central bank heavyweights that include Federal Reserve Chair Jerome Powell, European Central Bank head Christine Lagarde and Bank of Japan Governor Kazuo Ueda.
"In Europe, the data has to evolve to avoid a hike in September rather than the other way around," said James Rossiter, head of global macro strategy at TD Securities in London.
Rossiter noted how European Central Bank policymaker Martins Kazaks said on Tuesday that in order for the ECB to pause rate hikes in September, the region would need to see a sustained fall in inflation over the coming months.
"Maybe we'll see some successes on inflation here and there, but it just won't be enough," said Rossiter.
European inflation and rate hike hints from the Portugal meeting were also a focus for Tim Graf, head of EMEA macro strategy at State Street Global Advisors.
"Unless you get some big exogenous shock between now and the next ECB meeting, they're going to hike rates again," he said.
Across the Atlantic, the U.S. economy continues to show resilience in the face of tighter monetary conditions, he added.
"Recession probability models in the U.S. project a 55-70% to 65-70% probability we'll get a recession in the next 12 months. But we've been hearing this for the last 12 months, and it's not here," said Graf.
A broader bullish sentiment helped MSCI's broadest index of global shares tick up 0.2%. at 1134 GMT.
U.S. money market futures now imply around a 77% chance of a hike to 5.25-5.5%, and slightly more risk of a further move to 5.5-5.75%, which nudged short-term Treasury yields higher.