The stock market opened with red numbers. The IBEX 35 index fell 1.15 per cent to 7,880 points after the first run of the day. Only Indra rises, which has published good quarterly results. The Governing Council of the Bank of England presides over the day’s financial agenda. Analysts expect a sharp increase in interest rates of at least three-quarters of a point. The value of money can reach up to 3 percent. No one forgets that inflation in the United Kingdom has already exceeded 10 percent. The British Monetary Authority will thus follow in the footsteps of the United States Federal Reserve, which yesterday raised the value of money by a further 0.75 points. The chairman of the Federal Reserve, Jerome Powell, has assured that he prefers to work too hard rather than slashing his monetary policy. Powell expected inflation to be more under control by now, so interest rates were going to be slightly higher than the Fed expected.
The market is already giving a further increase of half a point in December and two more discounts by a quarter point in the following meetings. With these references, Wall Street stock markets fell sharply between 1.5 and 3.5 percent yesterday, the dollar gained higher (the euro is exchanged for less than $0.98) and bond yields increased. The 10-year US government bond yield has risen to 4.15 percent. In Europe, the next ECB meeting will take place in mid-December. Unit President Christine Lagarde is due to make a public appearance this morning. Just a few days ago, Lagarde clarified that she would continue tightening her monetary policy until inflation returns to the 2 per cent target. It is not an easy task, Because according to the last known CPI, inflation currently stands at 10.7 percent in the Eurozone.
Today we will know the trade balance and unemployment figures in the euro zone. In the United States, data on activity in the manufacturing sector, requests for durable goods and applications for unemployment benefits will be published. They will serve as an appetizer for the employment data to be published tomorrow. Analysts expect the unemployment rate in that country to rise by a tenth to 3.5 percent in October. The US economy would have added about 200,000 non-farm jobs, up from 263,000 in the previous month.
This has disappointed the index that measures activity in China’s services sector. The imprisonment of a section of the population is noteworthy due to the COVID zero policy.China’s non-manufacturing PMI has gone up from 49.3 to 48.4. A reading below 50 indicates contraction in activity. Morgan Stanley analysts have lowered their estimates for Chinese equity markets. He believes the Asian giant’s stock market could fall up to 22 per cent in the coming months in the worst-case scenario.
Indoors, the Treasury is holding a new medium- and long-term debt auction this morning. Holds five-year bonds and ten-year debentures, in addition to 19-year and 9-month “green” securities, and 8-year inflation-linked debt, It wants to capture a total of 5,250 million euros. Green bonds are so named because they are issued to finance eco-friendly projects. Inflation-linked bonds are those whose yields depend on the development of consumer prices. Its purpose is to protect savings. Those are titles that maintain a fixed coupon, but their principal increases as inflation develops.