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Investing.com – European markets saw choppy levels this Friday – and and… – after declines in Wall Street and Asia.
Investors are still closely watching the most important event of the week: the Symposium (Wyoming, USA) held annually by the Federal Reserve Bank of Kansas. The Chairman of the US Federal Reserve, , will appear at 5:05 PM ET. As she speaks, the President of the European Central Bank, at 10:00 pm Riyadh time.
Analysts at Link Securities noted that “in principle, we don’t expect Powell or Lagarde to ‘dwell’ on interest rates and monetary policy, mainly because we believe things are not clear to them at this point.”
These analysts added: “Thus, it remains to be seen how strong and sustainable the apparent recovery in economic growth in the United States will be, as well as, on the contrary, to what extent European economies will weaken and what effect all this can have on the development of inflation, which is reverberating in Continue to decline, at least in the services component.
And these analysts emphasized: “For this reason, we hope that the two officials will suffice with linking future measures regarding the official rates of both central banks to the data and macroeconomic indicators that have become known, without specifying the number of additional increases that they will implement before the end of the year.” Of course, if some investors expected Powell and Lagarde to finish raising interest rates today, we think they will be very disappointed.”
Analysts at Renta4 (BME) agreed with them: “We expect Powell to stick to the message he set out from July, reiterating that interest rate decisions will be made ‘meeting by meeting’ and will be ‘data driven’.” Initiation of interest rate cuts and the amount (which the market has begun to delay/ease due to the resilience of the US economy).”
Analysts at The Manager added: “In this sense, we highlight the remarks made yesterday by Bullard, former president of the Federal Reserve Bank of St. Louis, in which he stated that a re-acceleration of the US economy would translate into higher interest rates (for a longer period) than By assuming greater pressures on the US economy in the form of inflation.
Analysts at Inter Bank (BME:) also argued: “The Fed is approaching its target. In the US, it grew for 2023 by +2.4% (qoq), reaching (3.5%) at historic lows and developing (+3.2%) in the right direction. For this reason, we are dropping odds on (20 September)”.
What about Lagarde?
Analysts at Inter Bank said: “The ECB’s roadmap is looking less clear. We expect that, although the chances of a pause in rate hikes are not slim. Given the uncertainty in both statements, everything makes us think about the session.” Which saw stock markets drop and internal rates of return rise, in the aftermath of yesterday.”
Renta4 analysts commented: “We will see whether or not Lagarde’s speech will affect the fragility of the European economy, with the services sector joining manufacturing in deflationary territory, or on the contrary, this speech will continue to prioritize controlling uncomfortably high inflation.” (Prices are rising again, especially in the service sector and the business sector in the face of higher wages and fuel costs.)
They emphasized: “This situation is compounded by a cyclical slowdown as the situation picks up for the ECB (next meeting, September 14th). Although market expectations, after weak EMIs, were revised down by +25 basis points from 56% to 35%, only We can still hear the ‘hawkish’ voices: Nagel (Bundesbank chief) also confirmed yesterday that it is too early to pause interest rate hikes while emphasizing that inflation cannot be taken for granted.
Analysts at Link Securities concluded: “After all this, note that we dare not predict the market’s reaction to Powell’s speech. Before that, we believe that the major indices of European and US stock markets will move in a narrow price range, and may move in the negative territory.”
2023-08-25 11:22:00
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