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European Shares Seen Lower Ahead Of Powell's Testimony

asian market down 09jul19 lt

European stocks are set to open lower on Tuesday as investors look ahead to Fed Chairman Jerome Powell's testimony before Congress on Wednesday and Thursday for clues on U.S. monetary policy.

With a strong June U.S. jobs report dashing investors' expectations of an imminent interest-rate cut, investors wait to see whether the language will mark a clear shift from the Fed's earlier 'patient' stance.

Powell is due to testify before the House Financial Services Committee on Wednesday and before the Senate Banking Committee on Thursday.

Wednesday will also see the release of the minutes of the Fed's last monetary policy meeting, which may shed additional light on the central bank's decision to make notable changes to its accompanying statement.

Fed Chairman Powell is scheduled to deliver opening remarks at a Boston Fed conference on "Stress Testing" later today but may refrain from directly addressing interest rates.

On the data front, U.K. retail sales logged its worst June on record, data from the British Retail Consortium showed earlier today.

Like-for-like sales decreased 1.6 percent year-on-year in June, slightly larger than the 1.5 percent fall economists had expected. Total sales were down 1.3 percent.

Asian markets slipped into the red in lackluster trade and gold edged lower while the U.S. dollar held near multi-week highs. Oil dropped for the first time in a week on worries of weakening demand as the U.S.-China trade war drags on.

U.S. stocks ended lower for a second straight session overnight as optimism waned about an interest-rate cut at the Federal Reserve's next meeting, set for July 30-31.

The Dow Jones Industrial Average dropped 0.4 percent, the tech-heavy Nasdaq Composite shed 0.8 percent and the S&P 500 declined half a percent.

European markets edged lower on Monday, with fading hopes of Fed rate cuts, rising geopolitical tensions and uncertainty over the U.S.-China trade war weighing on sentiment.

The pan European Stoxx 600 ended flat with a negative bias. The German DAX dipped 0.2 percent, while France's CAC 40 index and the U.K.'s FTSE 100 both eased around 0.1 percent.

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