The selective remains 1% but has 8,500 points, highlighted in a day by the Fed’s monetary policy meeting
European stock markets are holding their breath as they await the monetary policy decision that the Federal Reserve (Fed) will take with the markets of the Old Continent already closed. The jitters prevailed towards the end and, after a bullish open that placed the Ibex-35 chart above 8,600 points, the selective finally gave up 1% without losing the 8,500 integers.
Banks were at the bottom of the table with declines of more than 4% for Bankinter or more than 3% for CaixaBank and Sabadell. BBVA for its part closed the session with a loss of 2.5%, while Santander exited 1.79%.
Solaria and Repsol, on the other hand, were the most bullish stocks with revaluations of 1.5% and 1.1% respectively at the end.
The market has been reckoning for weeks that Powell’s men will raise interest rates by 50 basis points to contain runaway inflation of 8.5% in March. Some analysts are even pointing out that the move would be much more aggressive, at 75 basis points, despite the economic slowdown the world leader experienced in the first three months of the year.
In any case, the increase is guaranteed. And if it stays at 50 basis points, it would already be the biggest attack since 2000, when Alan Greenspan was in charge of the organization.
“Given the highly aggressive communications and clear balance sheet preferences presented ahead of this meeting, we believe monetary policy decisions will leave few surprises for market participants,” said Allison Boxer, PIMCO US economist.
“Instead, all eyes will be on the statement and press conference for any indication of the speed of progress,” the experts added. And it is that, with the core (inflation preferred measure of the Federal Reserve) above 5% in the first quarter and a notable absence of mention of downside risks in their latest speeches, they expect the institution to remain on track to a new 50-base points walk in June.
On the other hand, investors are also waiting for some idea about the strategy to reduce the huge balance that has been built up in recent years. “Basically, the Fed has already stopped buying bonds in the secondary markets, but continues to reinvest the amount of the maturities of those it has in its portfolio,” Link Securities recalled in their daily report.
For that reason, they consider it feasible that it will be announced next Wednesday to stop this. Later on, the Fed will begin selling some of its portfolio, although we don’t think it will do so until official interest rates reach the “neutrality” level, which the Fed places close to 2.4%,” he said. experts. .
Against this backdrop, the dollar is maintaining its strength against the rest of the currencies and the euro is trading at $1,0512, down slightly from the previous session. On the commodities market, the oil price is rising again, with a barrel of Brent, a reference in Europe, above USD 106, while West Texas is around USD 104.
Source: La Verdad
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
