ECB’s time to hike, Italy’s time for more instability

Author of the article: (Updates to include Draghi’s resignation) A look at the day ahead in markets from Tommy Wilkes. If the European Central Bank’s inflation headache wasn’t bad enough, its first interest rate rise since 2011 will land on the day the government of its third-largest member state, Italy, fell apart. . Mario Draghi…
ECB’s time to hike, Italy’s time for more instability

Author of the article:

(Updates to include Draghi’s resignation)

A look at the day ahead in markets from Tommy Wilkes.

If the European Central Bank’s inflation headache wasn’t bad enough, its first interest rate rise since 2011 will land on the day the government of its third-largest member state, Italy, fell apart. .

Mario Draghi resigned as prime minister on Thursday after his coalition partners refused to heed his call for unity. Stocks have fallen and Italian borrowing costs climbed higher — a worry for an ECB desperate to contain market stress in its most indebted members.

The euro rose, however – helped by news Russian gas is flowing again through the Nord Stream pipeline after a 10-day maintenance shutdown.

Now investors are waiting for the bigger, if less dramatic, event of the day.

With sources this week said the ECB was weighing up a 50 basis-point rate increase rather than the 25 earlier flagged, a greater degree of uncertainty has crept into the meeting.

The other question is what detail the ECB might provide on a planned tool to contain bond market stress. Italy’s latest turmoil makes that task all the more urgent.

The ECB may look with some envy at the Bank of Japan which earlier on Thursday maintained ultra-low interest rates and signaled its resolve to remain an outlier in the policy-tightening wave.

Key developments that should provide more direction to markets on Thursday:

Central bank meetings in Turkey, South Africa

U.S. earnings: Blackstone, Dow Chemical Co, Freeport-McMoRan Copper & Gold, AT&T, Philip Morris International, Travelers Companies Inc, American Airlines, Twitter, Mattel

EU earnings: Ocado, SAP, Dassault

U.S. Initial Jobless Claims/Philly Fed business index

(Reporting by Tommy Wilkes; Editing by Sujata Rao)

Financial Post Top Stories

Sign up to receive the daily top stories from the Financial Post, a division of Postmedia Network Inc.

By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc. You may unsubscribe any time by clicking on the unsubscribe link at the bottom of our emails. Postmedia Network Inc. | 365 Bloor Street East, Toronto, Ontario, M4W 3L4 | 416-383-2300

Read More

Total
0
Shares
Leave a Reply

Your email address will not be published.

Related Posts
Oil Climbs as Russia’s Cut to Natural Gas Flows Escalates Crisis
Read More

Oil Climbs as Russia’s Cut to Natural Gas Flows Escalates Crisis

Author of the article: Bloomberg News Elizabeth Low and Alex Longley (Bloomberg) — Oil edged higher after Russia cut natural gas supplies to Poland and Bulgaria, escalating Europe’s energy crisis. West Texas Intermediate traded above $102 a barrel after gaining 3.2% on Tuesday. European gas prices surged as much as 24% Wednesday after Russia halted…
AMD Launches Ryzen 7000 Series Desktop Processors with “Zen 4” Architecture: the Fastest Core in Gaming¹
Read More

AMD Launches Ryzen 7000 Series Desktop Processors with “Zen 4” Architecture: the Fastest Core in Gaming¹

Author of the article: New AMD Socket AM5 platform combines with world’s first 5nm desktop PC processors to deliver powerhouse performance for gamers and content creators AUSTIN, Texas, Aug. 29, 2022 (GLOBE NEWSWIRE) — Today, AMD (NASDAQ: AMD) revealed the Ryzen™ 7000 Series Desktop processor lineup powered by the new “Zen 4” architecture, ushering in the…
Electric Trucks Get Boost From Multi-Megawatt Charging Stations
Read More

Electric Trucks Get Boost From Multi-Megawatt Charging Stations

Battery-powered big rigs are becoming more popular thanks to powerful new technology. Author of the article: Bloomberg News Ryan Fisher A Mercedes-Benz eActros electric cargo truck Photographer: Krisztian Bocsi/Bloomberg Photo by Krisztian Bocsi /Photographer: Krisztian Bocsi/Bl (Bloomberg) — Broad adoption of heavy-duty electric trucks is looking closer than ever with manufacturers releasing new big rigs…
Morgan Stanley’s Slimmon Warns Against Buying Growth-Stock Dip
Read More

Morgan Stanley’s Slimmon Warns Against Buying Growth-Stock Dip

Author of the article: Bloomberg News Michael P. Regan and Vildana Hajric (Bloomberg) — Investors should avoid the temptation to buy the dips in expensive high-growth stocks because “once the fever breaks, it lasts a long time,” according to Andrew Slimmon, senior portfolio manager at Morgan Stanley Investment Management. Slimmon joined the “What Goes Up”…