Daily Alert – Thursday 3rd February 2022: BoE and ECB move into the spotlight

Mark NugentDaily Alert, Feb 2022

Daily Alert – Thursday 3rd February 2022: BoE and ECB move into the spotlight

Good morning.

Risk sentiment turned sour yesterday after poor results and forecasts from Meta (Facebook) and Spotify both of whom are struggling to maintain the Covid bounce their respective businesses have enjoyed over the last two years.

My S&P500 long ground to a halt so I closed half the trade for a profit of around 0.5 percent. Not much of a gain, but a gain I didn’t have at the start of the week. The remainder of the trade remains in profit although it is heading down.

Today sees the European Central Bank’s rate and statement. Will the ECB turn hawkish in the face of rising inflation? Previous statements have been strongly opposed to hiking as the inflation is not being driven by Eurozone growth. Can Lagarde stick to her guns, or will she succumb to the need to be seen to be doing something, regardless of its efficacy? Over at the Bank of England, we expect a further hike to 0.50 percent as Mr Bailey and his monetary policy chums have no qualms about doing the wrong thing for the wrong reason. Each of these events can move the markets.

I’ll be back tomorrow with your Performance Report for January.

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