Don’t fight central banks – #Dont #fight #central #banks
From Anshuman Daga Europe and an outlook on the day ahead in global markets
Investors are once again turning to central banks as sentiment improves in global equity markets.
In economies and labour despite a series of data showing stronger-than-expected performance in its markets – inflation red signals for – stocks are on the mend.
MSCI’s index of global shares has recovered more than 2% this month after falling 3% in February and erasing much of January’s 7% gain.
On Tuesday, Asian stock markets rose, but the main focus of investors will be Federal Reserve Chairman Jerome Powell’s testimony before Congress on Tuesday and Wednesday.
Will Powell be able to send a decisive message to markets about the pace of future rate hikes? This is what markets zero in on.
Eurozone short-term government bond yields hawkish politician Robert Holzmann on Monday Europe It extended gains to a 14-year high after the central bank requested four more 50-basis rate hikes. productivity stabilized.
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Fed, ECB and BoE ‘terminal rates’ rise
Europe The Central Bank has already raised interest rates to 2.5%, a 3 percentage point increase since July, and has essentially promised another half percentage point hike on March 16.
Investment managers are cautious about European stocks after their strong performance so far this year.
Strategists at BlackRock Investment Institute expect the trend to end as the latest data pushes the European Central Bank to raise interest rates and keep them higher for longer.
While it is underweight in European equities, it favors the financials, energy, healthcare and consumer discretionary sectors.
And analysts at Schroders are in the camp of those who expect interest rates to be kept on hold by the ECB from March.
Schroders noted in a report that gas Increasing storage levels and falling energy prices are reducing the need to raise rates further, but he said part of the drop in energy demand in 2022 was due to mild winter weather, and a repeat of this winter was not guaranteed. .
Bloomberg News on Monday news adds that adding more pain in the tech world, there are thousands of job cuts at Meta Platforms, Facebook-just a few months after its parent cut more than 11,000 people from its workforce.
Bloomberg News on the corporate front news reported that German chemical distributor Brenntag is considering buying back at least 5% of its shares. This was done by activist investors to break up the company’s specialty division and cancellation when called upon to do so and initiate a share buyback program.
Meanwhile, Australia’s central bank raised its cash rate by 25 basis points to 3.60%, the highest level in more than a decade, and said it expected further tightening would be needed to curb inflation.
Key developments that could affect markets on Tuesday:
European economic data: ECB consumer expectations survey, UK BRC February retail sales, Halifax home prices
Speakers: Fed Chair Jerome Powell delivers semi-annual monetary policy statement – 1500 GMT
USA economic data: January bear wholesale sales, consumer credit
Reporting by Anshuman Daga; Edited by Sam Holmes
Our standards: Thomson Reuters Trust Principles.
2023-03-07 10:46:22
Source – reuters
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