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Marketmind: Glass half full or half empty?

Published 08/18/2022, 01:03 AM
Updated 08/18/2022, 01:05 AM
© Reuters. FILE PHOTO: Plastic letters arranged to read "Inflation" are placed on British Pound banknote in this illustration taken, June 12, 2022. REUTERS/Dado Ruvic/Illustration

A look at the day ahead in European and global markets from Anshuman Daga

Though some investors found reason for cheer in the Federal Reserve's minutes, there's little conviction that the spectre of high inflation and interest rates to match will fade anytime soon.

That is keeping markets on edge.

As central banks around the world point to rising prices remaining their enemy No. 1, how the impact of higher borrowing costs affects the chances of a "soft landing" for economies still tops the agenda of investors.

Surging British inflation has investors worrying about the damage that rate hikes will do to growth, leaving sterling to languish.

At least recession fears have put a lid on oil prices, if there were to be some sort of silver lining.

The dollar remained on the front foot and Asian equities retreated further on Thursday, uninspired by Wall Street's attempts to pare losses after the Fed minutes.

Today, Norway's central bank is expected to raise its benchmark interest rate by 50 basis points, more than it signalled in June, following a surge in consumer prices.

Final European inflation figures aren't expected to deviate from preliminary estimates.

On a day of sparse economic data, sports fans might focus on news that British billionaire Jim Ratcliffe is keen to buy Manchester United.

Ratcliffe, head of chemicals company INEOS, is from the Manchester area and a long-standing United fan. Earlier this year, he made an unsuccessful attempt to buy London club Chelsea.

Graphic: Shifting patterns of inflation - https://graphics.reuters.com/USA-FED/gdvzyojglpw/chart_eikon.jpg

Key developments that could influence markets on Thursday:

Economic data: July euro zone CPI, U.S. initial jobless claims, Philly Fed business index

© Reuters. FILE PHOTO: Plastic letters arranged to read

Kansas City and Minneapolis Fed presidents Esther George and Neel Kashkari speak

U.S. earnings: Applied Materials (NASDAQ:AMAT), Kohl's (NYSE:KSS)

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