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LGT Navigator: Treading water

Without any impetus from the US markets, which were closed for a holiday, the start of the week at European financial centres remained directionless, and turnover and activity were limited. The focus is now on the minutes of the latest interest rate decision by the US Federal Reserve. Investors are hoping for indications about the Fed's future direction.

Alessandro Fezzi, LGT
Tempo di lettura
5 minuto
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In Asia, the stock markets trended inconsistently on Tuesday. In Tokyo, the Nikkei 225 fell by around 0.2% after the Japanese purchasing managers' index came in at 47.4, down from 48.9 in January. In Hong Kong, the Hang Seng index was down around 1.6% shortly before the close and the Hang Seng tech index was down 3%. On the Chinese mainland, the Shanghai Composite was unchanged, while the Shenzhen Component was around 0.5% lower than the previous day. In Australia, the S&P/ASX 200 closed 0.2% lower. The Reserve Bank of Australia released the minutes of its February meeting during the day, reiterating the prospect of further interest rate hikes.

Europe's stock markets lacked momentum at the start of the week and, against the backdrop of the US holiday, trading remained very quiet. The EuroStoxx 50 closed virtually unchanged from Friday. 

ECB Governing Council member: Don't loosen the reins too soon

Finland's central bank chief and ECB Governing Council member Olli Rehn warns against easing too soon in the fight against high inflation. The ECB must raise interest rates preventively and continuously to keep inflation expectations under control and prevent a wage-price spiral. With inflation still high - in January the annual inflation rate in the euro area was 8.5% - further rate hikes beyond March are likely, logical and appropriate, Rehn commented in a newspaper interview.

The EU Commission in Brussels reported that consumer sentiment in the Eurozone improved for the fifth month in a row in February. The consumer confidence barometer rose 1.7 points from the previous month to minus 19.0, the highest level since February 2022.

German economy in a (mild) winter recession, according to Bundesbank

According to the German Bundesbank, the domestic economy recorded a weak start to the year and economic output is expected to be lower again in the first quarter than in the previous quarter. Although the tension on the energy markets and the associated uncertainty had eased considerably, industry started the year from a lower level after the significant decline in production in December. In addition, exports are suffering from weakening foreign demand and private consumption from persistently high inflation, the central bank commented in its monthly report. Over the year, things could slowly pick up again, but a significant improvement is not yet in sight, it said.


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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi,
Source: LGT Bank (Switzerland) Ltd.