Thank you, next By Reuters

© Reuters. FILE PHOTO: The DAX chart of the German stock price index is illustrated at the stock exchange in Frankfurt, Germany, December 5, 2022. REUTERS/Staff.

A look into the future in European and global markets from Ankur Banerjee

With markets teetering on the brink after hawkish rhetoric from the Fed, the Bank of England and the European Central Bank are poised to deliver rate hikes by 50 basis points and outline a path forward. their way in the fight against uncontrollable inflation even as their economy is moving towards recession.

The US central bank on Wednesday raised interest rates by half a percentage point after making four straight 75 bps hikes, but signaled borrowing costs would rise more by the end of 2023.

“I wish there was a completely painless way to restore price stability,” said Fed Chairman Jerome Powell. “No, and this is the best we can do.”

Asian stocks slipped, while the dollar wobbled and US Treasuries remained supportive. With an impending recession on investors’ minds, there is a hint of skepticism about whether the Fed will continue to raise interest rates amid slowing growth. At about 4.9%, the market priced the top of the fund rate lower than the average forecast of 5.1% from Fed officials.

And so the focus turns to the BoE and the ECB and what central banks outline on Thursday. Norges Bank and Swiss National Bank are also expected to raise rates, with economists forecasting a 25bp increase in Norway and a 50bp increase in Switzerland.

In China, a flurry of economic data for November showed worsening conditions due to severe COVID-19-related restrictions, and while Beijing has lifted some anti-virus restrictions– withdrawal, resulting in a spike in infections, highlighting the dilemma facing the world’s second-largest economy. largest economy.

The country’s central bank has ramped up cash injections into the banking system and left interest rates unchanged on medium-term policy loans to maintain ample liquidity conditions.

In the corporate world, Elon Musk, CEO of Tesla (NASDAQ: ) and owner of Twitter, sold $3.58 billion worth of stock in the EV maker this week. Musk, who recently lost his title of the world’s richest man, faces investor concerns that buying his social media company could cost him time away from Tesla, the company whose stock is down 55% in 2022.

Key developments that could affect the market on Thursday:

Economic events: BoE, ECB, SNB and Norges Bank policy meetings


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