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European stocks flat as traders await ECB monetary policy decision

European stocks plunged on Thursday as traders waited for a string of U.S. bank profits and the European Central Bank’s latest policy announcement.

The regional Stoxx 600 index changed slightly in early trades after a steady close in the previous session, with the German Dax and the French Cac 40 each slightly higher. The FTSE 100 index in London fell 0.4%.

The ECB’s governing council is set to release its latest monetary policy statement on Thursday afternoon. Economists said they would look for clues if the central bank takes another hawkish trend after its March decision Accelerate its exit From its plan to purchase bonds from the epidemic period.

The meeting comes as policymakers face peak inflation in the eurozone, where price growth reached 7.5% last month. Both the US Federal Reserve and the Bank of England have already begun raising interest rates in an attempt to curb intense price increases, but the ECB has noted that it must first stop buying its bonds before raising lending costs.

The ECB’s policymakers also have to deal with the winds caused by the war in Ukraine, which is expected to take an exorbitant price from the European economy. The minutes of the last meeting of the Board of Governors published earlier this month showed Policymakers were divided On how to cool the rise in prices, with a number of interest rate makers pushing the central bank to tighten monetary policy more aggressively than planned.

“The war shock implied by the war suggests a difficult compromise for the governing body, given weaker growth and higher inflation,” Goldman Sachs analysts noted. The investment bank expects the ECB to raise interest rates in September, but said a July rise would not be out of the question if inflationary pressures intensified.

Spiros Andreopoulos, a senior economist at BNP Paribas, said uncertainty surrounding the impact of the crisis in Ukraine “remains as high as ever”, meaning the ECB will likely refrain from making “any important decisions about its future policy path” at Thursday’s meeting.

The eurozone debt markets were stable before the ECB decision. The yield on the German Bund for 10 years changed slightly by 0.77 percent, with the yield for two years hovering around 0.07 percent.

U.S. banks, including Goldman Sachs, Citigroup and Morgan Stanley, are expected to announce first-quarter earnings later on Thursday. JPMorgan Chase earnings fell below analysts’ expectations on Wednesday.

Oil prices fell on Thursday as Brent international oil fell 1.1 percent to $ 107.61 a barrel.

In Asia, Hong Kong’s Hang Seng Index rose 0.5% and China’s CSI 300 rose 1.3%. The Japanese Topix index rose 1 percent and South Korea’s Caspay traded unchanged.

European stocks flat as traders await ECB monetary policy decision Source link European stocks flat as traders await ECB monetary policy decision

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