A look at the day ahead in European and global markets from Ankur Banerjee
An uneasy calm prevailed during Asian trade as investors digested a flurry of comments from central bank officials looking for signs of whether global interest rates have peaked, with Federal Reserve Chairman Jerome Powell once again taking center stage.
Powell on Wednesday did not comment on monetary policy in his opening remarks at the US central bank’s statistics conference, but is scheduled to speak at another conference on Thursday with traders prepared to scrutinize every word.
In a separate event on Wednesday, the European Central Bank’s chief economist, Philip Lane, said his bank needed to see more progress in easing inflationary pressures, and companies and governments needed to contribute to prevent further policy tightening.
Philadelphia Fed President Patrick Harker, at another event, said the Fed’s recent decision to keep interest rates steady was the right choice, and warned market participants not to get ahead of themselves.
“A lower interest rate is not likely to happen in the short term,” he said.
The ECB’s Lane will take the stage again on Thursday, while Bank of England chief economist Hugh Bell will also speak at another event, with any comments likely to weigh on the market given the bare economic calendar.
Futures point to a moderately lower open in European stock markets.
Investors will also be watching shares of Europe’s most valuable company, Novo Nordisk (NOVOb.CO), after US and British regulators gave the thumbs-up to Eli Lilly’s Zepbound weight loss treatment on Wednesday. The approval paves the way for a strong competitor to the blockbuster drug Wegovy in tackling record obesity rates.
In Asia, Chinese real estate stocks are back in the spotlight. They rose late Wednesday after Reuters reported that China’s State Council had instructed the local government of Guangdong province to help arrange the rescue of Country Garden by Ping An Insurance Group (601318.SS).
Ping An later said in a statement to Reuters that the government “did not ask her to take over Country Garden.”
On Thursday, Ping An shares continued their declines. Country Garden (2007.HK) and other property stocks gave up some of the gains they made the day before.
Meanwhile, data on Thursday showed consumer prices in China falling and factory door contraction continuing in October, indicating growing pressure on demand as the world’s second-largest economy struggles to emerge from a post-pandemic recession.
Elsewhere, Hollywood actors reached a tentative agreement with major studios on Wednesday to resolve the second of two strikes that have rocked the entertainment industry this year as workers demanded higher wages in the era of live television.
Key developments that may impact markets on Thursday:
Earnings: AstraZeneca, Merck KGaA, Deutsche Telekom
Speakers: ECB Chief Economist Philip Lane and Bank of England Chief Economist Hugh Bell at two separate events; Fed Chairman Powell later in the day
(Reporting by Ankur Banerjee in Singapore – Prepared by Mohammed for the Arabic Bulletin) Edited by Christopher Cushing
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