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14 Apr

The corporate earnings season in the US started negatively. The ECB is on the verge of tightening monetary policy

April 14, 2022

by JustForex

The growth of yields on US government bonds stopped, which led to a decrease in the dollar index and, as a result, to the growth of major indices. At the end of the day yesterday, the Dow Jones Index (US30) gained 1.02%, the S&P 500 (US500) added 1.13%, and the NASDAQ Technology Index (US100) jumped by 2.03%.

JPMorgan started the quarterly earnings season with disappointing results. JPMorgan’s first-quarter earnings fell by 42%. The report missed Wall Street estimates due to higher-than-expected debt reserves as the bank forecasted a higher probability of declining reserves risk.

Asset management firm BlackRock reported quarterly results that exceeded top and net income expectations due to the growth of assets under management.

Canada is struggling with high inflation – the latest consumer price report shows that prices are rising at the fastest pace in 30 years. That data, along with a strong labor market, left the central bank with no choice but to raise interest rates. Moreover, the Bank of Canada immediately raised the interest rate from 0.5% to 1%. At the press conference, the Bank of Canada Governor said that the central bank is ready to act as decisively as necessary to achieve the inflation target and return to a neutral range of 2% and 3%. The rise in interest rates in the medium term is accompanied by an increase in the national currency.

European stock markets were mostly growing yesterday. German DAX (DE30) decreased 0.34%, French CAC 40 (FR40) gained 0.07%, Spanish IBEX 35 (ES35) added 0.46%, British FTSE 100 (UK100) jumped by 0.055%. The European Central Bank (ECB) will hold its monetary policy meeting today, and pressure is building on policymakers to start tightening monetary policy as inflation continues to rise in Europe. Analysts are confident that the ECB will not change anything. However, amid such a spike in inflation, surprises may arise in the form of an immediate cessation of the quantitative easing program.

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More than half of German citizens oppose the immediate embargo on oil and gas from Russia.

On Wednesday, oil prices rose for the second day in a row, rising by about 4% after jumping more than 6% in the previous session. Crude oil prices have been rising since Tuesday, when China lifted some of its strict Covid blockade measures over the past two weeks, raising hopes of increasing consumption by the world’s second-largest oil consumer. Crude oil inventories rose 9.4 million barrels last week, compared to an increase of 2.4 million barrels the previous week. Analysts had expected an average weekly increase of 2.4 million barrels.

Stock indices of the Asia-Pacific region traded higher yesterday. Japanese Nikkei 225 (JP225) gained 1.93%, Australian S&P/ASX 200 (AU200) added 0.34%, and Hang Seng of Hong Kong (HK50) jumped by 0.26%. The Bank of Korea surprised markets with a rate hike, and the Monetary Authority of Singapore also tightened its monetary policy.

Main market quotes:

S&P 500 (F) (US500) 4,446.97 +49.52 (+1.13%)

Dow Jones (US30) 34,568.15 +347.79 (+1.02%)

DAX (DE40) 14,076.44 -48.51 (-0.34%)

FTSE 100 (UK100) 7,580.80 +4.14 (+0.055%)

USD Index 99.90 -0.39 (-0.39%)

Important events for today:
  • – Australia Unemployment Rate (m/m) at 04:30 (GMT+3);
  • – Switzerland Producer Price Index (m/m) at 09:30 (GMT+3);
  • – Eurozone Deposit Facility Rate at 14:45 (GMT+3);
  • – Eurozone ECB Interest Rate Decision at 14:45 (GMT+3);
  • – Eurozone ECB Press Conference at 15:30 (GMT+3);
  • – US Retail Sales (m/m) at 15:30 (GMT+3);
  • – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
  • – US Michigan Consumer Sentiment (m/m) at 17:00 (GMT+3);
  • – US Natural Gas Storage (w/w) at 17:30 (GMT+3);
  • – US FOMC Member Mester Speaks at 22:50 (GMT+3).

by JustForex

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.


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