Lagarde and the protagonists of the ECB markets

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With Asian markets closed for the Lunar New Year, markets are mostly watching central bank statements. Lagarde reiterated that the rate hike will continue.

He ate asian markets closed for Lunar New Year, AEC AND caterpillar are in the spotlight more than ever.

As the two’s next meetings approach central banks protagonists of the global economy and finance, scheduled for the beginning of February, investors are wondering about the impact of their monetary policies on stocks, bonds, currencies, government accounts.

Specifically, the focus is on Eurotower’s hawkish turn, with the governor herself reiterating her intention to fight inflation with interest rate hikes in the coming months.

In this framework, theEUR regained strength against the dollar.

“hawkish” ECB dominates financial markets

With the closure of major financial centers in Asia, including Hong Kong, Shanghai, Singapore and Seoul, much of global investor attention is focused on the central banks and US corporate profits. Big names like Microsoft and Intel report results this week that will help shape the outlook for the technology sector.

In a context of renewed confidence in risk assets on Wall Street, where a determined but less aggressive Fed is expected, the dollar it approached a nine-month low against the euro and gave up recent gains against the yen on Tuesday, as traders weigh the risks of a US recession and the Federal Reserve’s policy path.

The US Dollar Index – which measures the dollar against a basket of six pairs including the euro and yen – fell 0.12% to 101.89, returning to a 7-and-a-half-month low of 101.51 reached last week. I’EUR it gained 0.08% to $1.0880, approaching Monday’s high of $1.0927, the strongest since April.

Money market participants see just two more quarter-point rate hikes from the Fed to a peak of around 5% in June, with two subsequent quarter-point cuts before the end of the year. The Fed itself has insisted that further tightening of 75 basis points is likely.

On the contrary, the European single currency was supported by the comments of those responsible for the European central bank which pointed to a greater tightening of the aggressive policy.

The last one was the president Christine Lagarde, who reiterated on Monday that the central bank will continue to raise interest rates rapidly to slow inflation, which remains very high. While energy prices are beginning to slow their historic advance, theunderlying inflation it is still very hot and this leads the ECB to complete its task: to bring the consumer price index back to 2%.

In summary, this is Lagarde’s message as she approaches the February 2 meeting, more anxious than ever.

Source: Money It

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