Economic news

Marketmind: ECB day to follow a hawkish Fed

2023.06.15 07:30


© Reuters. The headquarters of the European Central Bank (ECB) are pictured in Frankfurt, Germany, July 8, 2020. REUTERS/Ralph Orlowski

A look at the day ahead in U.S. and global markets from Dhara Ranasinghe.

A day after the Federal Reserve took markets by surprise with a hawkish message, it’s the European Central Bank’s turn in the hot seat.

Short-dated government bond yields in the United States and Europe are heading back up and bullish stock markets are starting to feel, well a little bit less bullish.

While the Fed was widely expected to, and did, keep rates unchanged, the U.S. central bank left the door open to more increases ahead.

Analysts at BNY Mellon (NYSE:) noted that Fed projections – both the projected level of the funds rate and the sheer number of members that saw higher rates – was much more hawkish than expected.

And so to the ECB, which is all but certain to raise borrowing costs to their highest level in 22 years on Thursday.

It’s also tipped to leave the door open to more hikes, extending its fight against high inflation even as the euro zone economy flags.

For markets, hopeful that the run of rate hikes would soon pave the way for a pause in increases and for easing later this year as growth slows, disappointment is sure to follow.

Or perhaps not? Even after the more hawkish message from the Fed on Wednesday, market pricing for the rate trajectory has not changed too much.

Money markets price in roughly one more 25 basis point rate increase from the Fed, while the ECB may struggle to sound hawkish while inflation in the bloc is coming down.

Perhaps that helps explain why the euro has edged off one-month peaks hit on Wednesday near $1.0865.

ING analysts reckon the euro/dollar exchange rate now faces some “moderate downside risks.”

Key developments that should provide more direction to U.S. markets later on Thursday:

* ECB rate decision at 1215 GMT

* US June Philly Fed index, May retail sales, industrial production data due out

Source link

Related Articles

Back to top button
bitcoin
Bitcoin (BTC) $ 98,394.36 0.24%
ethereum
Ethereum (ETH) $ 3,424.12 2.19%
tether
Tether (USDT) $ 1.00 0.02%
solana
Solana (SOL) $ 256.95 1.63%
bnb
BNB (BNB) $ 664.65 2.59%
xrp
XRP (XRP) $ 1.47 4.07%
dogecoin
Dogecoin (DOGE) $ 0.438068 4.46%
usd-coin
USDC (USDC) $ 1.00 0.02%
cardano
Cardano (ADA) $ 1.07 1.43%
staked-ether
Lido Staked Ether (STETH) $ 3,423.22 2.24%
tron
TRON (TRX) $ 0.215288 3.49%
stellar
Stellar (XLM) $ 0.588336 38.51%
avalanche-2
Avalanche (AVAX) $ 42.68 3.26%
the-open-network
Toncoin (TON) $ 6.48 16.27%
shiba-inu
Shiba Inu (SHIB) $ 0.000027 0.44%
wrapped-steth
Wrapped stETH (WSTETH) $ 4,059.37 2.24%
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 98,182.31 0.05%
polkadot
Polkadot (DOT) $ 9.16 22.74%
chainlink
Chainlink (LINK) $ 17.84 6.37%
bitcoin-cash
Bitcoin Cash (BCH) $ 514.31 4.37%
weth
WETH (WETH) $ 3,425.16 2.25%
sui
Sui (SUI) $ 3.46 3.38%
pepe
Pepe (PEPE) $ 0.000021 2.87%
leo-token
LEO Token (LEO) $ 8.66 1.02%
near
NEAR Protocol (NEAR) $ 6.49 4.36%
litecoin
Litecoin (LTC) $ 101.41 2.35%
aptos
Aptos (APT) $ 13.02 2.06%
uniswap
Uniswap (UNI) $ 11.04 8.06%
wrapped-eeth
Wrapped eETH (WEETH) $ 3,609.08 2.35%
hedera-hashgraph
Hedera (HBAR) $ 0.150903 0.97%
internet-computer
Internet Computer (ICP) $ 11.78 7.97%
crypto-com-chain
Cronos (CRO) $ 0.199331 6.34%
usds
USDS (USDS) $ 1.00 0.41%
polygon-ecosystem-token
POL (ex-MATIC) (POL) $ 0.584942 12.57%
ethereum-classic
Ethereum Classic (ETC) $ 30.22 3.65%
render-token
Render (RENDER) $ 7.97 2.63%
bittensor
Bittensor (TAO) $ 539.68 4.49%
fetch-ai
Artificial Superintelligence Alliance (FET) $ 1.52 16.00%
kaspa
Kaspa (KAS) $ 0.154041 1.13%
ethena-usde
Ethena USDe (USDE) $ 1.00 0.07%
arbitrum
Arbitrum (ARB) $ 0.888577 9.74%
bonk
Bonk (BONK) $ 0.000048 5.64%
cosmos
Cosmos Hub (ATOM) $ 9.17 19.20%
whitebit
WhiteBIT Coin (WBT) $ 24.74 0.48%
filecoin
Filecoin (FIL) $ 5.91 19.51%
vechain
VeChain (VET) $ 0.043319 7.76%
dai
Dai (DAI) $ 1.00 0.01%
mantra-dao
MANTRA (OM) $ 3.73 2.27%
dogwifcoin
dogwifhat (WIF) $ 3.34 0.29%
okb
OKB (OKB) $ 54.74 10.55%