MORNING BID EUROPE – Wait before data dumping

MORNING BID EUROPE – Wait before data dumping
MORNING BID EUROPE – Wait before data dumping

Rae Wee provides an update on the European and global markets for the day ahead.

The lack of new catalysts in the market on Thursday meant that higher and longer interest rates were here to stay, at least until the next round of economic data proves otherwise.

However, much-anticipated data at the end of the week – from euro zone inflation to the US consumer price index report – appears unlikely to significantly change the outlook for policy. global monetary situation, especially as inflation in the main economies continues to blow hot and cold.

With consumer prices in Germany having risen more than expected, attention is turning even more to the euro zone figures on Friday, which will be published before the cut in interest rates planned by the European Central Bank (ECB) next week.

And although a June cut is all but a given, the lack of clarity from ECB policymakers about the extent and speed of the rate cut thereafter is making markets nervous.

However, before Friday’s major releases, investors will first have to navigate Thursday, and market waters are becoming increasingly choppy.

European stocks are off to a rocky start after their Asian counterparts were left in a sea of ​​red, with rising global bond yields also denting risk sentiment.

The two-year US Treasury yield flirted with 5% on Thursday, while the 10-year yield remained near its highest level in weeks.

The yield differentials between the United States and other countries may not widen much in favor of the dollar, but they remain large enough for the dollar to remain the currency of choice for investors.

In the corporate sector, investors in the BHP group welcomed the decision of the world’s leading mining group to abandon its plan to buy Anglo American for $49 billion, after having rejected three offers proposed by its great rival over the past few years. last six weeks.

Although BHP’s Australian-listed shares fell almost 2% on Thursday, they remained in line with its peers.

Key developments likely to influence markets on Thursday:

– Unemployment rate in the euro zone (April)

– Business climate in the euro zone (May)

– Eurozone economic sentiment (May)

– Eurozone industrial sentiment (May)

– Eurozone services sentiment (May)



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