Hawkish ECB May Slow But Not Reverse Euro Selloff
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The Europeans and the Brits finally found an agreement on the very complicated Northern Ireland issue yesterday.
But for now, investors warned that they don’t necessarily expect the deal to remove only all of the uncertainty weighing on prices.
Brexit deal
And if the Windsor Framework could help sterling and small British stocks recover, all the FTSE 100 wants is a rebound in energy and commodity prices, rather than a Brexit deal…
Occidental Petroleum
Occidental Petroleum missed earnings and revenue expectations when it announced its Q4 results yesterday, and fell 1.2% in afterhours trading, despite announcing a 38% increase in its dividend and a $3 billion share buyback.
Shell
Shell, on the other hand, bounced almost 2% higher in Amsterdam yesterday despite a 1% decline in crude oil.
European and US markets
European and US markets traded in the green yesterday, but the news other than the Windsor Framework was not necessarily encouraging for the central bankers.
US core durable orders expanded more than expected, and pending home sales surged 8% thanks to softer mortgage rates on a broad-based decline in yields. The latter data remained consistent with the strong and the resilient US economy, calling for more rate hikes from the Federal Reserve (Fed) to slow inflation.
Stocks market
So despite yesterday’s relief, the US yields will certainly remain under a decent positive pressure. And higher yields will, at some point, weigh on equity valuations.
The S&P500 tested the 200-DMA, which stands at 3940, to the downside last Friday. A fall below that level is expected to accelerate the selloff.
Watch the full episode to find out more!
- 0:00 Intro
- 0:42 EU & UK finally agrees on Northern Ireland!
- 3:53 Occidental Petroleum falls after earnings
- 4:13 Shell up on Goldman upgrade
- 5:47 Crude oil under pressure
- 6:24 Equity rally at risk
- 8:13 Hawkish ECB may slow but not reverse euro selloff
Ipek Ozkardeskaya
Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020.
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