Global shares fell on Tuesday and the euro hit a fresh two-decade low against the dollar, as fears of tighter monetary policy and a European energy crisis darkened market sentiment.

The European Stoxx 600 share index slipped 0.3 per cent lower in early dealings, having dropped by its most in more than a month on Monday. Germany’s Xetra Dax lost 0.3 per cent and London’s FTSE 100 dropped 0.3 per cent.

A broad FTSE index of Asia Pacific shares fell 1 per cent and Japan’s Nikkei 225 closed 1.2 per cent lower.

The moves came ahead of the Jackson Hole central bankers’ symposium later this week, at which US Federal Reserve chair Jay Powell is expected to underline a commitment to raising interest rates to quell consumer demand in order to tackle stubbornly high inflation.

“Chair Powell is likely to state that the Fed will raise rates as far as it takes, and for as long as it takes,” Standard Chartered strategist Steve Englander said.

Minutes from the Fed’s July monetary policy meeting — at which it raised its main interest rate by 0.75 percentage points to a target range of 2.25 per cent to 2.5 per cent — showed that policymakers discussed keeping rates at levels that would restrict the US economy.

Futures trading on Tuesday implied Wall Street’s S&P 500 share index would fall 0.5 per cent on Tuesday, having closed 2.1 per cent lower in the previous session in its steepest daily drop in more than two months.

Also weighing on investor sentiment, contracts tracking Europe’s TTF natural gas contract hit a record closing high on Monday, and extended their gains on Tuesday, after Russian gas monopoly Gazprom announced further maintenance closures for its crucial Nord Stream 1 pipeline to Europe.

The euro fell 0.3 per cent to $0.9913 to a fresh 20-year low, having dropped below parity with the dollar on Monday, as fears about Russia choking gas supplies to Europe in retaliation for western support of Ukraine clouded the eurozone economic outlook.

In bond markets, the benchmark 10-year US Treasury yield fell 0.04 percentage points to just under 3 per cent. This debt yield, which underpins loan pricing worldwide, had climbed in recent days as traders anticipated a hawkish tone from Powell at Jackson Hole.