European Shares Set To Follow Wall Street Lower On Fed Rate Concerns

(RTTNews) - European stocks are seen opening lower on Thursday after U.S. stocks ended sharply lower overnight amidst monetary policy concerns.

The Federal Reserve held its benchmark interest rate steady but Chair Kevin Warsh's focus on "price stability" signaled an increasingly hawkish pivot.

That said, regional losses may remain capped somewhat after a host of reports showed U.S. President Donald Trump and his Iranian counterpart had remotely signed a preliminary agreement to end the 110-day conflict.

The official text of the memorandum of understanding reached over the weekend has been released, which include the immediate and permanent termination of military operations on all fronts, including in Lebanon, the reopening of the Strait of Hormuz, and the lifting of a U.S. naval blockade against Iran.

Iran has committed to "downblending" its stockpile of highly enriched uranium, with a senior official calling it a "significant concession" by Iran. The sanctions relief is tied to the nuclear settlement.

Iran will receive waivers for crude oil exports, petroleum products and associated banking services immediately upon the signing of the MOU.

Israel was not a party to the negotiations or the MOU. All the technical details will be ironed out in the 60-day negotiating period that commences after the scheduled signing ceremony taking place in Switzerland on Friday.

Trump has threatened to resume attacks and kill Iranian officials if they failed to honor their commitments.

Meanwhile, the Bank of England is set to keep interest rates unchanged at 3.75 percent later today. The Swiss Bank may also leave its key policy rate unchanged at 0 percent.

Asian markets were mixed amid concerns that the U.S. Federal Reserve may hike interest rates later this year.

The U.S. dollar clung to a more than two-month high while Brent crude futures fell more than 2 percent below $78 a barrel, extending declines toward pre-conflict levels after the IEA warned of a potential supply glut.

Gold jumped 1.6 percent to $4,324 an ounce, recouping losses from the previous session.

Overnight, U.S. stocks tumbled while Treasury yields climbed as the Federal Reserve left interest rates unchanged as widely expected, but the latest set of projections suggested there could be at least one increase to its main rate this year.

After removing "forward guidance" from the policy statement, Kevin Warsh said in his first press conference as Fed Chair that it was no longer useful and that he would consider a revamp of how the Fed communicates with financial markets and U.S. households and businesses.

He asked investors to react to incoming reports on inflation, the job market and other economic indicators rather than trying to predict the Fed's next move. He also chose not to submit the famous "dot plot", saying it's not helpful in the conduct of policy.

Earlier in the day, data showed retail sales increased more than expected in May. Pending home sales grew 4.8 percent in the month, signaling stronger housing demand. The tech-heavy Nasdaq Composite lost 1.3 percent, the S&P 500 declined 1.2 percent and the Dow dipped 1 percent.

European stocks eked out modest gains on Wednesday to extend gains for a fifth straight session as investors awaited details of the U.S.-Iran peace agreement.

The pan-European STOXX 600 gained half a percent. While the German DAX and the U.K.'s FTSE 100 both edged up by 0.1 percent, France's CAC 40 slipped 0.2 percent.