Market Analytics and Considerations
Key Notes
As a result of further encouraging economic statistics, European stock markets advanced on Wednesday, continuing the solid start to the year.
At 04:35 ET (09:35 GMT), the CAC 40 in France, the DAX index in Germany, and also the FTSE 100 in the United Kingdom all traded 1.1% up.
According to preliminary statistics released on Wednesday, French inflation surprisingly decreased in December, with the EU-harmonized headline inflation decreasing to 6.7percentage points in December from 7.1percentage points in November. This news builds on the encouraging information from Germany’s neighbor in the week.
These figures imply that the European Central Bank might cease its tightening cycle sooner than originally anticipated, which might help explain why the Eurozone’s recession is not as severe as anticipated.
Additional U.S. employment statistics and the minutes from the most recent Federal Reserve meeting are scheduled for later in the session.
Markets will probably examine the report carefully in search of any cues about the Fed’s officials’ outlook for the future of interest rates. At the Fed’s meeting scheduled, the market expects a 1⁄4 percentage point rise in the reference rate. It will also be interesting to observe how doves and hawks differ on how higher the endpoint rate should rise.
On Wednesday, oil prices declined, continuing the year’s slow start, as investors worried that a worldwide recession would have an adverse effect on 2023 consumption.
This came as the president of the IMF cautioned that 2023 could be a difficult year for most of the international economy since the primary drivers of economic growth, the United States, Europe, and China, are all suffering less performance.
