Economic data: Euro zone Jan flash PMI Europe results: Vodafone, GSK, Novartis, Banco Bilbao Fed rate decision at 1900 GMT followed by news conference at 1930 GMT U.S. economic data: Jan ISM U.S. results: eBay <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Rates to catch up with inflation? Rates to catch up with inflation? ECB expected to hike again ECB expected to hike again ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Anshuman Daga; Editing by Jacqueline Wong)
A look at the day ahead in European and global markets from
Anshuman Daga
Global markets face their biggest test so far this year as
the Federal Reserve appears poised to hint of an end to interest
rate hikes at its meeting on Wednesday.
Investors are pricing in a quarter-of-a-percentage-point
increase in the Fed's benchmark interest rate, which would mark
the smallest hike since U.S. central bankers kicked off their
tightening cycle 10 months ago with one the same size.
Still, there's an air of caution, with markets leaving
little scope for any nasty surprises.
In Europe, the region's central bank is expected to deliver
50-basis-point rate rises at each of its next two meetings, with
the first one taking place on Thursday.
But the forecasts still risk lagging behind policymakers'
guidance on how high rates will go.
The Bank of England is also expected to raise its interest
rates by half a percentage point to 4% on Thursday.
For today, European markets will focus on euro zone January
flash PMI data, while results are due from Vodafone , GSK and Novartis .
While the euro zone unexpectedly managed to avoid a
recession in the fourth quarter, high energy costs, waning
confidence and rising interest rates are expected to take a toll
on the economy this year.
Germany and Italy figured among the biggest euro zone
countries that recorded negative growth rates for the quarter
but France and Spain expanded.
Surveys published on Wednesday showed Asia's factory
activity contracted in January as the boost from China's COVID
reopening had yet to offset headwinds from slowing U.S. and
European growth, underscoring the fragility of the region's
economic recovery.
Asian stock markets held steady, supported by signs of a
slowdown in U.S. wages that buoyed Wall Street overnight.
Meanwhile, European Union banking regulators on Tuesday
launched a stress test to check how banks could cope with a long
period of high inflation and interest rates just as the European
Central Bank is expected to raise borrowing costs further.
Bayer came under pressure after a top-10
shareholder called on the group's supervisory board to replace
CEO Werner Baumann quickly, in a move aimed at restoring
investor trust and reviving the German drugmaker's sagging share
price.
Key developments that could influence markets on Wednesday:
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