On Monday, European equities gained as the focus switched away from the omicron Covid type and toward monetary policy choices by some of the world’s most powerful central banks. The Stoxx 600 index increased 0.5 percent across Europe, with most sectors and major bourses in positive territory. Automobiles, natural resources, and technology equities rose more than 1%.
The FTSE in the United Kingdom rose 13 points to 7,305. The DAX in Germany rose 133 points to 15,757. Moreover, the CAC in France rose 21 points to 7,014.
The Federal Reserve of the United States, the Bank of Japan, the Bank of England, and the European Central Bank are all expected to make decisions this week, making it a critical week for monetary policy. It comes as central bankers increasingly focus on super-high inflation and how they respond. Inflation in the United States hit its highest level since 1982 on Friday. However, markets shrugged it off, with the S&P 500 having its best week since February.
Klaus Baader, Global Chief Economist at Societe Generale, mentioned a busy week ahead for central banks on Monday’s morning note.
Accelerated tapering and hints for an early rate hike by the Fed,” he predicts, as well as the ECB’s intention to put the PEPP on hold. He also expects the Bank of England “reluctantly” to maintain its stance. At the same time, the Bank of Japan continues to be accommodative.
Early Monday, U.S. stock futures are trading slightly higher. In Asia, markets soared as traders overcame concerns about the new omicron Covid variant’s transmissibility and severity. The United Kingdom upped its Covid threat level on Sunday, with Prime Minister Boris Johnson predicting a “tidal wave” of Covid cases due to omicron. Booster vaccinations will be available to all adults in England starting this week.
Investors in Europe will be watching the Bank of England’s financial stability report and the outcomes of the United Kingdom’s stress tests. At 5:30 p.m. London time, Bank of England chief Andrew Bailey is due to conduct a press conference.
The OPEC group of major oil producers will also release its monthly oil market report, keenly monitored. Oil prices increased on Monday as optimism grew that the impact of omicron would be less severe than initially anticipated and that demand would remain strong.
Credit Suisse announced an executive board reshuffle early Monday regarding individual stock action.
Meanwhile, Santander ordered to pay Andrea Orcel 68 million euros to withdraw its CEO offer on Friday.
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