{"id":450,"date":"2023-02-05T16:02:24","date_gmt":"2023-02-05T21:02:24","guid":{"rendered":"https:\/\/embarrdowns.com\/european-markets-rise-ahead-of-ecb-and-boe-rate-decisions-and-earnings-reports\/"},"modified":"2023-02-05T16:02:25","modified_gmt":"2023-02-05T21:02:25","slug":"european-markets-rise-ahead-of-ecb-and-boe-rate-decisions-and-earnings-reports","status":"publish","type":"post","link":"https:\/\/embarrdowns.com\/european-markets-rise-ahead-of-ecb-and-boe-rate-decisions-and-earnings-reports\/","title":{"rendered":"European Markets Rise Ahead of ECB and BoE Rate Decisions and Earnings Reports"},"content":{"rendered":"

European stocks rose on Thursday, continuing a rally from Wall Street and as investors prepared for a slew of corporate earnings and rate decisions by the European Central Bank and the Bank of England.[0]<\/a><\/sup> This comes after Federal Reserve chair Jerome Powell made comments on the path forward for inflation and the likelihood that Europe’s major central banks will increase rates by more than the Federal Reserve in policy decisions later.[0]<\/a><\/sup><\/p>\n

It appears that the Bank of England is not diverging much from market expectations, which means that it may be up to data in the UK to drive any large swings in the pound rather than surprises from the BoE.[1]<\/a><\/sup> As markets doubt the ECB’s hawkishness, EUR\/GBP may manage to stay below 0.9000 for now, although a break higher seems highly likely over the coming months.[1]<\/a><\/sup><\/p>\n

The Federal Reserve reduced the amount of its interest-rate increases and recognized that inflation numbers were lower than expected, while indicating that it will most likely require a “couple of more” hikes to arrive at sufficiently restrictive levels.[2]<\/a><\/sup> The ECB and the BoE both cautioned that the battle against inflation is far from over.[3]<\/a><\/sup> <\/p>\n

It is anticipated that the Federal Reserve will increase rates by a quarter of a percent when their verdict is published on Wednesday at 2 PM Eastern Time.[4]<\/a><\/sup> The ceiling rate would be increased to 4.75% from the current 4.5%.[4]<\/a><\/sup> Yields on 10-year US Treasuries have slipped to 3.5 per cent from 3.9 per cent at the end of December.[5]<\/a><\/sup> This has boosted the appeal of corporate bonds, which typically offer higher returns than their government counterparts with Treasury yields now trading under 3.4%, a long way from the 4.33% peak seen in October last year.[6]<\/a><\/sup> <\/p>\n

Overall, markets are doubting today’s hawkish lines by Christine Lagarde and the Fed on Wednesday, but it’s been quite clear that markets have doubted both Fed Chair Powell’s and ECB President Lagarde’s attempts to hang on to hawkish communication, although dovish bets on the Fed appear more strongly founded at this stage.[1]<\/a><\/sup> Investors will be closely watching the rate decisions and earnings reports to see how the markets react.<\/p>\n

0. <\/span>“European shares rise amid Powell inflation comments, ECB and BoE rate decisions By Investing.com” Investing.com, 2 Feb. 2023, https:\/\/www.investing.com\/news\/stock-market-news\/european-shares-rise-amid-powell-inflation-comments-ecb-and-boe-rate-decisions-2993919<\/a><\/a><\/p>\n

1. <\/span>“FX Daily: Eyes Back On Data After Fed And ECB Communication …” MENAFN.COM, 3 Feb. 2023, https:\/\/menafn.com\/1105519781\/FX-Daily-Eyes-Back-On-Data-After-Fed-And-ECB-Communication-Troubles<\/a><\/a><\/p>\n

2. <\/span>“EUR\/USD: Looking beyond the market\u2019s trust issues with the Fed and ECB” ING Think, 2 Feb. 2023, https:\/\/think.ing.com\/articles\/eur-usd-fed-ecb-and-the-net-zero-game-for-diffident-markets<\/a><\/a><\/p>\n

3. <\/span>“Markets Play Game of Chicken With Central Banks on Pivot Bets” Yahoo! Voices, 3 Feb. 2023, https:\/\/www.yahoo.com\/now\/markets-play-game-chicken-central-071115879.html<\/a><\/a><\/p>\n

4. <\/span>“Forexlive Americas FX news wrap: US dollar moves higher as the market gears up for the Fed” ForexLive, 30 Jan. 2023, https:\/\/www.forexlive.com\/news\/forexlive-americas-fx-news-wrap-us-dollar-moves-higher-as-the-market-gears-up-for-the-fed-20230130\/<\/a><\/a><\/p>\n

5. <\/span>“Euro Hits New High as US Dollar Collapses in Fed Aftermath. Where to for EUR\/USD?” DailyFX, 2 Feb. 2023, https:\/\/www.dailyfx.com\/news\/euro-hits-new-high-as-us-dollar-collapses-in-fed-aftermath-where-to-for-eur-usd-20230202.html<\/a><\/a><\/p>\n

6. <\/span>“Central banks to lift rates to 15-year highs as investor jitters grow” The Irish Times, 30 Jan. 2023, https:\/\/www.irishtimes.com\/business\/2023\/01\/30\/central-banks-to-lift-rates-to-15-year-highs-as-investor-jitters-grow\/<\/a><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

European stocks rose on Thursday, continuing a rally from Wall Street and as investors prepared for a slew of corporate earnings and rate decisions by the European Central Bank and the Bank of England.[0]<\/a><\/sup> This comes after Federal Reserve chair Jerome Powell made comments on the path forward for inflation and the likelihood that Europe’s major central banks will increase rates by more than the Federal Reserve in policy decisions later.[0]<\/a><\/sup><\/p>\n

It appears that the Bank of England is not diverging much from market expectations, which means that it may be up to data in the UK to drive any large swings in the pound rather than surprises from the BoE.[1]<\/a><\/sup> As markets doubt the ECB’s hawkishness, EUR\/GBP may manage to stay below 0.9000 for now, although a break higher seems highly likely over the coming months.[1]<\/a><\/sup><\/p>\n

The Federal Reserve reduced the amount of its interest-rate increases and recognized that inflation numbers were lower than expected, while indicating that it will most likely require a “couple of more” hikes to arrive at sufficiently restrictive levels.[2]<\/a><\/sup> The ECB and the BoE both cautioned that the battle against inflation is far from over.[3]<\/a><\/sup> <\/p>\n

It is anticipated that the Federal Reserve will increase rates by a quarter of a percent when their verdict is published on Wednesday at 2 PM Eastern Time.[4]<\/a><\/sup> The ceiling rate would be increased to 4.75% from the current 4.5%.[4]<\/a><\/sup> Yields on 10-year US Treasuries have slipped to 3.5 per cent from 3.9 per cent at the end of December.[5]<\/a><\/sup> This has boosted the appeal of corporate bonds, which typically offer higher returns than their government counterparts with Treasury yields now trading under 3.4%, a long way from the 4.33% peak seen in October last year.[6]<\/a><\/sup> <\/p>\n

Overall, markets are doubting today’s hawkish lines by Christine Lagarde and the Fed on Wednesday, but it’s been quite clear that markets have doubted both Fed Chair Powell’s and ECB President Lagarde’s attempts to hang on to hawkish communication, although dovish bets on the Fed appear more strongly founded at this stage.[1]<\/a><\/sup> Investors will be closely watching the rate decisions and earnings reports to see how the markets react.<\/p>\n

0. <\/span>“European shares rise amid Powell inflation comments, ECB and BoE rate decisions By Investing.com” Investing.com, 2 Feb. 2023, https:\/\/www.investing.com\/news\/stock-market-news\/european-shares-rise-amid-powell-inflation-comments-ecb-and-boe-rate-decisions-2993919<\/a><\/a><\/p>\n

1. <\/span>“FX Daily: Eyes Back On Data After Fed And ECB Communication …” MENAFN.COM, 3 Feb. 2023, https:\/\/menafn.com\/1105519781\/FX-Daily-Eyes-Back-On-Data-After-Fed-And-ECB-Communication-Troubles<\/a><\/a><\/p>\n

2. <\/span>“EUR\/USD: Looking beyond the market\u2019s trust issues with the Fed and ECB” ING Think, 2 Feb. 2023, https:\/\/think.ing.com\/articles\/eur-usd-fed-ecb-and-the-net-zero-game-for-diffident-markets<\/a><\/a><\/p>\n

3. <\/span>“Markets Play Game of Chicken With Central Banks on Pivot Bets” Yahoo! Voices, 3 Feb. 2023, https:\/\/www.yahoo.com\/now\/markets-play-game-chicken-central-071115879.html<\/a><\/a><\/p>\n

4. <\/span>“Forexlive Americas FX news wrap: US dollar moves higher as the market gears up for the Fed” ForexLive, 30 Jan. 2023, https:\/\/www.forexlive.com\/news\/forexlive-americas-fx-news-wrap-us-dollar-moves-higher-as-the-market-gears-up-for-the-fed-20230130\/<\/a><\/a><\/p>\n

5. <\/span>“Euro Hits New High as US Dollar Collapses in Fed Aftermath. Where to for EUR\/USD?” DailyFX, 2 Feb. 2023, https:\/\/www.dailyfx.com\/news\/euro-hits-new-high-as-us-dollar-collapses-in-fed-aftermath-where-to-for-eur-usd-20230202.html<\/a><\/a><\/p>\n

6. <\/span>“Central banks to lift rates to 15-year highs as investor jitters grow” The Irish Times, 30 Jan. 2023, https:\/\/www.irishtimes.com\/business\/2023\/01\/30\/central-banks-to-lift-rates-to-15-year-highs-as-investor-jitters-grow\/<\/a><\/a><\/p>\n","protected":false},"author":3,"featured_media":449,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[47],"tags":[],"_links":{"self":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts\/450"}],"collection":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/comments?post=450"}],"version-history":[{"count":0,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts\/450\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/media\/449"}],"wp:attachment":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/media?parent=450"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/categories?post=450"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/tags?post=450"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}