Fed and BoE meetings this week

Equity markets started November higher, following an October in which they more than erased September’s losses. Good corporate results in Q3 seemed to show that rising costs were not weighing on margins, but this is only possible if selling prices rise, which supports inflation fears. The ECB meeting last week showed that central banks are finding it increasingly difficult to convince the markets that they will not raise interest rates quickly, and at the same time, bond markets are anticipating that this tightening will weigh on growth, hence the tension on the short end of the yield curve, while longer-term rates are easing. In the Eurozone, concerns are more evident in the widening spreads between German rates and those of southern European countries, particularly Italy and Greece, two highly indebted countries that have benefited greatly from ECB bond purchases.

Energyscan economics news

The positive trend in the equity markets seems to be reversing in Asia and Europe following the publication of China’s PMIs, which were down in October, and the persistence of Covid cases in the country. The ISM industrial survey in the US also confirmed inflationary pressures as key Fed and Bank of England meetings approach this week. And finally, the Biden plan still appears to be stalled by dissent in the US Democratic Party.

Today’s main focus will be on Eurozone manufacturing PMIs, whose first estimate was relatively stable in October. The EUR/USD exchange rate, which had fallen sharply on Friday despite the good growth figures for the Eurozone in Q3, is back around 1.16.

Share this news :
Share on twitter
Share on linkedin
Share on email

You might also read :

March 1, 2021

Steep backwardation hampers crude spot buying

Brent prompt future contract partially recovered from Friday’s sell-off, at 65.6 $/b, as the Iranian nuclear deal seemed in jeopardy after the Iranian refusal to join…
February 25, 2022

High volatility in oil prices

The price of a barrel of Brent crude oil rose yesterday to almost $106, before falling back below $98 and then finally rising back to…
Join EnergyScan

Get more analysis and data with our Premium subscription

Ask for a free trial here

Don’t have an account yet?  Sign up here!