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Central bank week

Once again, monetary policy takes centre stage on the financial markets. In the new week, the Bank of Japan and Australia's central bank (Tuesday), China's central bank and the Fed (Wednesday) and, on Thursday, the Swiss National Bank, the Bank of England and Norway's central bank will announce their monetary policy decisions. The US Federal Reserve will take centre stage, although it is likely to further hold off an initial interest rate cut in the face of more persistent inflationary pressure. 

Alessandro Fezzi, LGT
Tempo di lettura
5 minuto
Fed building
© Shutterstock

At the start of the week, the Nikkei 225 index in Tokyo led the gains on the Asia-Pacific markets, while Chinese equities extended their gains after data showed that the Chinese economy started the year on a strong note. Ahead of the Bank of Japan's interest rate decision, the Nikkei 225 closed 2.7% higher and the Topix climbed just under 2%. South Korea's Kospi was 0.7% higher after recording a loss of almost 2% on Friday, while the small-cap index Kosdaq gained almost 1.5%. In China, the latest data showed that retail sales and industrial production rose more than expected in the first two months of the year. The Chinese CSI-300 index rose by 0.6% following the data. The Hang Seng Index in Hong Kong turned positive by the end of afternoon trading and was recently trading around 0.3% higher. In Australia, the S&P/ASX 200 closed practically unchanged from Friday's close.

On Wall Street on Friday, the share indices went into the weekend with losses. The Dow Jones Industrial closed 0.5% lower at 38,714.77 points. The S&P 500 lost 0.6% and closed at 5,117.09 points. On the technology-heavy Nasdaq, the indices fell by around 1.1%. Adobe shares came under heavy pressure, plummeting by almost 14% on Friday. The software company had previously disappointed with its outlook for the current quarter. Meanwhile on the bond market, the yield on ten-year US government bonds climbed to 4.31%.

Further economic data confirmed that the current economic situation in the US is deteriorating to a certain extent. For example, consumer sentiment deteriorated in March. As reported by the University of Michigan, the consumer confidence barometer fell from 76.9 to 76.5 points, marking the second consecutive month of decline. On the other hand, consumer sentiment had reached its highest level since mid-2021 at the beginning of the year. At the same time, the New York Federal Reserve reported a significant deterioration in sentiment in the regional industrial sector. The Empire State Index fell from minus 2.4 to minus 20.9 points in March. Although economists had expected a worsening, they expected it to be much more moderate at minus 7.0 points. Below the zero line, the barometer points to a decline in economic activity in the economic region.

In France, inflation cooled further in February. Over the year as a whole, consumer prices rose by 3.2%, the lowest rate of inflation since October 2021. At the beginning of the year, the inflation rate in the second-largest economy in the eurozone was still 3.4% and in December it was 4.1%. Compared to the previous month, the cost of living rose by 0.9% in February. In Italy, inflation weakened further in February from an already very low level. The annual inflation rate was still 0.8% compared to 0.9% at the beginning of the year.

Corporate news in focus: Hannover Re Q4 results.  

Economic data in focus: Austria consumer prices, Eurozone consumer prices and trade balance, USA NAHB property market index. 

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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Lten steht Ihnen ein Berater der Bank gerne zur Verfügung.

Herausgeber: LGT Bank (Schweiz) AG, Glärnischstrasse 36, CH-8027 Zürich
Redaktion: Alessandro Fezzi
Quelle: LGT Bank (Schweiz) AG