The Fed’s latest rate decision looms

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Eurozone inflation falls for the third straight month as energy prices continue to fall

Inflation in the euro zone reached 8.5% in January, according to preliminary data published on Wednesday.

The 20-member region saw substantial price increases in 2022 after Russia’s invasion of Ukraine pushed up energy and food costs across the bloc. However, inflation began to subside at the end of 2022, showing two consecutive months of reduction in general levels. In December, the rate was registered at 9.2%.

—Silvia Amaro

Major central banks prepare to signal interest rate slide path

The Federal Reserve Building is seen before the Federal Reserve board is expected to signal plans to raise interest rates in March as it focuses on fighting inflation in Washington, on January 26, 2022.

Joshua Roberts | Reuters

The US Federal Reserve, the European Central Bank and the Bank of England are expected to raise interest rates once more this week as they make their first monetary policy announcements for 2023.

Economists will closely watch the rhetoric of politicians for clues about the path of future rate hikes this year, as the three main central banks try to engineer a soft landing for their respective economies without allowing inflation to regain momentum.

The market is pricing in a 25 basis point hike by the Fed on Wednesday, but the key question is what the Federal Open Market Committee will say about further rate hikes in 2023.

Meanwhile, increases of 50 basis points are expected from the ECB and BOE on Thursday.

Read the full story here.

—Elliot Smith

Stocks on the Move: Husqvarna Up 6.2%, QinetiQ Down 4.2%

Swedish seller of outdoor machinery husqvarna was the biggest gainer after the open, rising 6.2%, despite reporting a higher operating loss in the fourth quarter. However, adjusted for items including a restructuring, the loss narrowed.

At the bottom of the Stoxx 600 Index, the UK defense firm QinetiQ shed 4.2%.

German reinsurer Hannover Rueck it was down a similar amount after reporting higher results for the full year that were in line with its earlier forecast.

—Jenni Reid

European markets open higher as investors prepare for the next Fed hike

Europe’s Stoxx 600 rose 0.3% in early trading, with travel stocks up 0.9% and financial services up 0.8%.

The UK’s FTSE 100 gained 0.25%, France’s CAC 40 rose 0.17% and Germany’s DAX rose 0.1%.

The rally from the beginning of the year has faltered, but European markets still managed to gain 6.72% through January.

Wednesday will be dominated by the Federal Reserve’s monetary policy announcement, where an increase of 25 basis points is expected, as well as clues about its future trajectory and assessment of the US economy.

—Jenni Reid

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European markets: here are the opening calls

European markets are heading for a bullish open on Wednesday as investors focus on the latest monetary policy announcement from the US Federal Reserve today.

the United Kingdom FTSE 100 The index is expected to open 10 points higher at 7,781, that of Germany DAX 30 points higher with 15,154, France ACC up 10 points to 7,096 and that of Italy FTSE MIB it rose 75 points to 26,721, according to IG data.

Profits come from Vodafone, GSK and Novartis. The main data release in Europe on Wednesday is the preliminary euro zone inflation figures for January.

—Holly Ellyatt

China’s factory activity contracts again

China’s factory activity in January signaled a further contraction from previous readings, albeit at a slower pace, marking the sixth straight monthly contraction.

The Caixin Manufacturing Purchasing Managers’ Index for January came in at 49.2 on Wednesday, up slightly from December’s 49.0 but still below Reuters expectations of 49.5.

“Both manufacturing supply and demand continued to decline last month. The fallout from the pandemic was a drag on production and sales,” Caixin said in the press release.

—Lee Yingshan

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