Indexes Grow in Europe While Dropping in Asia

Later today, the Bank of England and the European Central Bank (ECB) will meet. They should raise rates by 0.5 percent each.

Awaiting new decisions by central banks, the pan-European Stoxx 600 index rose by 0.9 percent, and the London FTSE 100 rose by 0.3 percent, the Financial Times reports.

Major Asian indexes experienced a drop. Hang Seng index in Hong Kong fell by 0.5 percent; the Shanghai CSI by 0.3 percent, and the Japanese Nikkei by 0.2 percent.

Contracts tracking Wall Street’s benchmark, S&P 500, rose 0.3 percent. At the same time, the tech-heavy Nasdaq gained 0.9 percent before the New York Stock Exchange opened.

Shares of Meta rose 20 percent in premarket trade on stronger-than-expected fourth-quarter revenue, and CEO Mark Zuckerberg’s promise that 2023 would be the “year of efficiency.”

The S&P 500 rose to its highest level since August on Wednesday after the Fed decided to raise interest rates by a quarter of a percent, following a series of hikes of 0.5 percent and 0.75 percent. The U.S. federal funds rate is now between 4.5 and 4.75 percent.

Yields on 10-year Treasuries fell to 3.40 percent by Thursday morning, and the dollar index, which tracks the U.S. currency against a basket of six currencies, was down 0.2 percent. Traders expect the Fed to raise interest rates again by 0.25 percent in March.

Fed is lowering interest rates

World markets have met with hope and trepidation this week, in which the three major Western central banks will hold their first meetings of the current year on the topic of interest rate hikes. The European Central Bank, the Bank of England, and the U.S. Federal Reserve are likely to raise rates again, but by a smaller percentage than in the past few months.

Most attention goes to the Fed, whose Federal Open Market Committee (FOMC) will announce a decision on a possible slowdown in interest rate increases after a two-day meeting on Wednesday. Expectations of a rate cut rose as annual U.S. inflation fell to 6.5 percent in December, the lowest level in more than a year.