The Capricorn Is Stuck At 8,000 Points Awaiting The Fed

Date:

The market expects the agency to raise interest rates by 75 basis points, although there are voices pointing to a more aggressive move

Investors don’t want to risk even more from the US Federal Reserve (Fed) meeting that begins Tuesday and the results of which will be known the next day. Gains remained on the national floor, but they were limited, with the Ibex-35 rising 0.3% at the end, which was not enough to recover 8,000 points.

Naturgy (+3.13%) led the way, followed by IAG (+1.82%), Aena (+1.52%), Fluidra (+1.52%), Amadeus (+1, 34% ) and Banco Sabadell (+1.31). %). On the negative territory were PharmaMar (-1.77%), Acciona Energía (-1.76%), Acciona (-1.38%), Meliá (-1.35%) and Rovi (-0.96%) on.

The market is facing some important days when the central banks of the United Kingdom, Japan, Switzerland and Sweden will also decide on their monetary policy. And all indications are that the organizations will continue the aggressive tone of recent months regarding the withdrawal of incentives to contain inflation. But the most important meeting will undoubtedly be that of the American institution.

Right now, futures are anticipating a 76% probability that the Fed will raise its benchmark interest rates by 75 basis points at this meeting, although in recent days there has been speculation that the rise could be as high as 100 points given the downside resistance shown by inflation. .

From Link Securities’ analysis department, they explain that “until now, investors expected the Fed to raise its benchmark interest rates to 4% and keep them at that level for a period of time, until they verified that inflation was decreasing and on track.” towards the target of 2%.”

However, they clarify that the inflation behavior in August and the strength that the labor market continues to show has caused these expectations to be revised upwards, “with many analysts now expecting the Fed to raise its rates to 4.5% or even above that.” level .

It is precisely this scenario that led to declines in markets and Western bond prices last week, which will continue to be under pressure on Monday with another rate hike (moving counter to price).

In any case, and despite the fact that fighting inflation is the priority, there is a fear in the market that central bank moves will eventually lead to a recession. Particularly in oil, with a barrel of Brent, a benchmark in Europe, falling to $90, while the US West Texas is trading around $84.

Source: La Verdad

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Share post:

Subscribe

Popular

More like this
Related