Investors expect a rate hike of 50 basis points, but with a more aggressive speech from Christine Lagarde
The Spanish stock market is in for the most important session of the week, with investors still processing Wednesday’s US Federal Reserve (Fed) meeting. The European Central Bank (ECB) is taking matters into its own hands this Thursday in a meeting in which investors expect a rate hike of 50 basis points – lower than the 75 of the last meetings – but with a tougher speech from the monetary bureau.
The institution thus takes over from the Fed, which on Thursday opted for a 50 basis point increase after four consecutive increases of 75 basis points. Since then, the Fed has distanced itself from market expectations and made it clear that it will continue to raise interest rates to combat high inflation and will do so to levels above what it had expected in September (5.1% vs. 4 .6%). % in September). The data is also higher than the 4.86% expected by the market.
Link Securities analysts recall that the Fed also ruled out the possibility of cutting its rates in 2023, “something that won’t happen until 2024, when inflation shows clear signs of approaching the 2% target.” At the moment, they indicate that the most important thing for investors from now on is to check to what extent the institution is prepared to increase its rates (terminal rate).
For now, the Ibex-35 is holding its breath with drops of 1% and below 8,300 points, with banks pulling down along with other big names such as ArcelorMittal or Inditex, where investors collect benefits after the presentation of their quarterly results. Enagas, Indra and IAG lead the top of the table.
Meanwhile, in the commodities market, the price of a barrel of Brent is trading slightly higher, to $82.8, while the US West Texas is around $77.
Source: La Verdad
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
