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Stock exchanges, optimistic Europe looks at quarterly earnings and central banks

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Stock exchanges, optimistic Europe looks at quarterly earnings and central banks

(Il Sole 24 Ore Radiocor) – In the aftermath of a positive session, with the technological ones that have given a boost to the lists starting from Wall Street, the Stock Exchanges of the Old Continent open with a further improvement. Investors are focused on quarterly seasonalso underway in Italy while in the United States it is already in full swing, and indications are awaited from central banks who will announce new interest rate decisions next week. Even if there is no confirmation for the moment, there is hope that Fed e Bce embrace a less aggressive policy, in a context in which the slowdown in the global economy could be more limited than expected.

Oil prices moved little, with the eyes on the Chinese question, which appears to be recovering after the end of the restrictive policy against Covid. Natural gas prices fell by 9% to 60 euros per megawatt hour, after having scored a first position at 59.7 euros. On the currency, the euro is confirmed close to 1.09 on the greenback and is worth 1.089 dollars (from 1.0826 yesterday).

Tokyo closes higher encouraged by the Fed

The Tokyo Stock Exchange closed sharply higher, like the day before, encouraged by the increasingly credible scenario of a further slowdown in the pace of monetary tightening by the Fed. The Nikkei index rose by 1.46% to close at 27,299 .19 points, the highest level since mid-December; the Topix index gained 1.42% to 1,972.92 points. The Hong Kong Stock Exchange and markets in mainland China have been closed since yesterday due to the Chinese New Year holidays. Several members of the Fed’s Monetary Committee have hinted in recent days that the US central bank could limit the next rate hike to a quarter of a percentage point compared to half a point in December: a scenario that particularly benefits technology stocks.

See also  Afternoon Commentary: The three major stock indexes rose across the board, the Shanghai index rose 0.75%, the GEM index rose 1.2%, and consumer stocks were active.

Australian stocks advanced around 0.4%, while many other markets in the region remained closed due to Chinese New Year celebrations. New Zealand shares rallied slightly as investors continued to look favorably on new Prime Minister Chris Hipkins pledging to prioritize the economy.

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Eyes on central banks

After a start to the year that greatly benefited the European stock exchanges to the detriment of the US ones, there has been a slight trend reversal in recent sessions. This is because the market increasingly prices a cautious Fed and – at the same time – a more aggressive ECB. If in recent weeks there was also widespread hope in Europe that – thanks to the drop in gas prices and inflation expectations – the ECB could become softer and raise rates a little less than expected, the latest positions taken by the various members of the ECB have annihilated these hopes. Finally, also the declarations – once again harsh – of the president Christine Lagarde on Monday evening. Moral: The market is 100% pricing in a 50bps rate hike on February 2, and a second hike from 50bps in March with a 70% implied probability in futures prices.

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