European markets lower as investors assess interest rate outlook

Investing.com – European commodities were expected to be lower on Tuesday as investors revised their 2023 rate hikes ahead of expectations that the Bank of Japan will end its recent ultra-loose monetary policy.

As of 02:00 ET (07:00 GMT), Germany’s DAX futures were down 0.9%, France’s CAC 40 futures were down 0.6%, and UK FTSE 100 futures were down 0.6%.

Asian stocks fell on Tuesday, with Japan’s Nikkei 225 down 2.5 percent, keeping interest at record lows, but European shares are likely to follow suit as government bonds rise…

The central bank announced that it will increase the range of 10-year Japanese government bonds to minus 0.5 percent, from minus 0.25 percent to 0.25 percent.

The move was seen as a move to abandon the country’s curvilinear controls and almost zero interest as the country’s rising battles escalate.

Last week, the European Central Bank raised interest rates by 50 basis points in a further move to curb inflation, as did the US Federal Reserve, the Bank of England, and the Swiss National Bank.

Factory prices in Germany fell 3.9 percent from November but remained at an annual rate of 28.2 percent.

Separately, EU energy ministers agreed on Monday to cap gas prices at 180 euros per megawatt, in the latest attempt to reduce gas prices, which have pushed up electricity rates and boosted growth this year.

Hopes for the new year have risen recently as oil prices rallied on Tuesday and China, the world’s largest oil importer, fully lifted covid-related restrictions.

The optimistic view was confirmed by the news that the US government has almost replenished its strategic oil reserves, which began with the purchase of 3 million barrels in February, and has driven the prices to 40 years, to control prices. Save

Later in the meeting, the American Petroleum Institute will release its estimates for US crude oil inventories, which are likely to show a modest decline after a week of sharp increases.

At 2:00 p.m., the price of US oil futures in the eastern US rose by 0.5% to $75.78 per barrel and Brent rose oil 0.4% to $80.15. Both contracts traded at higher levels in the previous session, slightly higher than this year.

Meanwhile, gold was up 0.3 percent at $1,802.30 an ounce, while EUR/USD was down 0.1 percent at 1.0598.

European shares fell after the decision of the Bank of Japan. German PPI drops

Investing.com – European stocks fell on Tuesday as investors focused on the outlook for interest rates in 2023 after the Bank of Japan eased its ultra-loose monetary policy.

As of 3:50 AM ET (0850 GMT), the German DAX was down 0.4%, the UK FTSE 100 was down 0.2% and the French CAC 40 was down 0.7%.

The move was seen as the country’s attempt to relinquish yield curve control and near-zero interest rate policies as the country battles rising inflation.

Last week, the European Central Bank, together with the US Federal Reserve, the Bank of England, and the Swiss National Bank, raised interest rates by 50 points in an attempt to curb inflation.

Factory prices in Germany fell 3.9% in November but remained at 28.2% year on year.

Separately, EU energy ministers on Monday agreed to cap gas prices to €180 per megawatt-hour in a last-ditch effort to lower gas prices, raise electricity prices this year, and push inflation to record levels.

In company news, Bunzl (LON: BNZL) shares fell 0.6% after the UK-based outsourcing group agreed to buy four companies and sell its UK healthcare arm.

Shares of Orange (EPA: ORAN) fell 0.9% after the French telecommunications giant announced that Ramon Fernandez, executive vice president, and chief financial officer, is leaving the company.

Oil prices stabilized after an early rally as news from the Bank of Japan raised the possibility of a slowdown in the world’s third-largest economy.

But China, the world’s largest oil importer, has largely lifted restrictions imposed by Covid-19, encouraging optimism for demand growth in the new year.

The American Petroleum Institute published estimates of US crude inventories at the end of the session, which is expected to show a slight decrease after a sharp increase last week.

As of 3:50 am ET, US oil rose 0.1% to $75.42 a barrel, while Brent crude fell 0.1% to $79.78.

In addition, gold futures rose 0.9 percent to $1,813.15 an ounce, while EUR/USD rose 0.3 percent to $1.0634.

November 2022 Financial Stability Review

The effects of stagnant growth and weak economic activity have hit Eurozone housing and businesses as the industrial crisis pushed Ukraine into civil war.

The November 2022 Financial Stability Review (FSR) shows how the deteriorating economic and financial environment has increased risks to financial stability in the euro area. This year, financial asset prices have fallen significantly across many countries and asset classes, leading to increased market volatility and sometimes reduced market liquidity. Rapid changes in asset prices due to several market participants, particularly non-financial companies and non-financial institutions, test the availability of liquidity, resulting in unexpected margin calls. These asset price movements reflect more uncertainty about the extent of monetary policy to control inflation in developed countries. This is not the first time that a derivatives position has been used or opened, the impact of market disturbances is often felt far beyond the direct impact on investors.

As economic conditions tighten, the vulnerabilities of states, households, and corporations are likely to manifest. Although economic activity has been disrupted due to the pandemic, underemployment and unemployment remain low due to various policy support measures. 

Europe in Review 2013: the recession and beyond

Europe faces many challenges ahead of the new year, including inflation, energy, and economic conditions. Therefore, investors should focus on recession risk, the ECB, and European equities. Graeme Seker, Chief European Equity Strategist, and Jens Eisenschmidt, Chief Economist for Europe.An important note on economic sanctions. This summary identifies countries that are generally subject to comprehensive or targeted sanctions programs administered or administered by the Department of Foreign Affairs (OFAC), the European Union, and/or other countries. I said. government body. All references in this report to sanctioned legal entities, debt or equity instruments, legal entities, or individuals are entirely secondary to the overall structure of the business environment in Russia and are closely related to the financial situation. global and should not be construed as recommendations. or advice on investing activities for that division, unit, or project. Users of this report are solely responsible for ensuring that investment activities involving sanctioned countries are conducted under applicable sanctions.

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