© Reuters. FILE PHOTO: Shopping carts are seen at a supermarket in Manhattan, New York City, U.S., June 10, 2022. REUTERS/Andrew Kelly/File Photo
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Ankur Banerjee’s view of the day ahead in European and global markets
After a series of sharp comments from central bank officials, investors lost risk appetite towards the end of the week, with the US dollar on top and Asian shares heading into the red for a second week in a row.
Concerns about an economic slowdown, the direction of inflation and concerns about the pace of monetary tightening are weighing on sentiment. And so we await next week, when US CPI data due on Tuesday will shed light on whether disinflation is well and truly underway.
But before that, UK GDP data for the fourth quarter is due later on Friday and is expected to be unchanged, according to a Reuters poll. The British blue-chip hit a new all-time high on Thursday. It is the third time it has hit a new high in less than a week, and the GDP report is likely to weigh on the market that day.
Investors are also waiting for the Japanese government to unveil a new candidate for Bank of Japan governor, also on Tuesday. Data released on Friday showed wholesale prices rose 9.5% in January from a year earlier, another sign of inflationary pressures that could keep the central bank under pressure to gradually wind down its massive stimulus program.
Meanwhile, China’s factory prices fell more than economists expected in January, while the consumer price index was 2.1% higher than a year earlier in the month, but slightly below the 2.2% increase economists had forecast in a survey. Reuters.
In the corporate world, attention will be on Britain’s Standard Chartered (OTC:) after new reports emerged of renewed interest from First Abu Dhabi Bank (FAB), the United Arab Emirates’ largest lender, in a takeover of the bank. FAB said on Friday that it was not currently evaluating a possible bid for StanChart.
In the Adani saga, index provider MSCI is reducing the weightings of four Adani Group companies, including parent company Adani Enterprises, in a blow to the conglomerate.
Since short-seller Hindenburg published its report on Adani last month, about $110 billion has been wiped off the value of the group’s seven main listed companies.
Key events that could affect the markets on Friday:
Economic Events: UK GDP, Manufacturing and Industrial Production
Speakers: ECB Board Member Luis de Guindos, BOE’s Huw Pill