Rolling coverage of the latest economic and financial news
European stock markets are expected to open lower, as investors brace for central bank decisions in the UK, eurozone and the US later this week.
These major central banks are expected to raise interest rates to their highest levels since the financial crisis, which could further slow the global economy, as they battle the highest inflation rates seen in decades.
Last week’s sudden surge of exuberance from US markets appears to be being driven by a belief that not only will the US economy avoid a hard landing, but that the Federal Reserve will not only signal another step down in its rate hiking cycle to 25bps but will also signal a pause.
This belief that we could see a pause in the Fed’s rate hiking cycle was given legs last week, when the Bank of Canada signalled that it was doing exactly that to further assess the impact of recent rate hikes on the wider economy.
The strong start to 2023 appears to have given way to a little bit of caution for markets in Europe as we look to this week’s trifecta of central bank meetings, and what sort of outlook is painted by the Federal Reserve, ECB and Bank of England, and more importantly how many more rate hikes can we expect to see after next week.
This caution looks set to translate into a lower open for markets in Europe this morning ahead of Q4 German GDP numbers which are expected to show the economy in Germany ground to a halt.
With Asian tourists now returning and a strong US dollar encouraging Americans to explore Europe, we’re seeing robust demand for Easter and summer 2023 flights.
Over the past 3 years, numerous airlines went bankrupt and many legacy carriers (incl. Alitalia, TAP, SAS and LOT) significantly cut their fleets and passenger capacity, while racking up multi-billion-euro State Aid packages.
These structural capacity reductions have created enormous growth opportunities for Ryanair.
