Investing.com - European markets remain bullish at mid-session -Ibex 35, CAC 40, DAX... - , waiting for the interest rate decision of the European Central Bank (ECB), scheduled for 13:15 London time.
"After what we saw yesterday with the Fed, we are now betting that the ECB will launch a 'softer' message than we expected before on the future of its monetary policy, a message that would be more justified than that of the US central bank given the weakness that the region's economy has been showing," Link Securities points out.
"If this premise is fulfilled, it would be normal for the reaction of both bonds and stocks in the region to be positive. If, on the other hand, the ECB opts for caution and insists that its main objective is to control inflation, leaving the door open to further rate hikes, if deemed necessary, we believe that this will lead to some selling in both markets", these experts add.
"Also watch out for the ECB's macro picture update, which will give us a better idea of how the monetary authorities see the momentum of the cycle (possible downward revision) and inflation (which could also moderate somewhat), which in turn will determine their future actions in terms of rates and balance sheet (with their current plan, PEPP reinvestment will continue until Dec-24, a date that could be brought forward to mid-year to avoid coinciding with the start of the rate cut)," add Renta 4 (BME:RTA4).
"Although our expectations for rate cuts are somewhat more cautious than the market is discounting and more towards the second half of the year, unless the European monetary authorities make an announcement today ( very hawkish message ), we will see a positive market in Europe, passing on the impact of yesterday's low IRRs in the US", agree Bankinter (BME:BKT).
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Translated from Spanish using DeepL