Fed’s latest interest rate decision ahead

BBVA’s chairman discusses the company’s record profits

BBVA's chairman discusses the company's record profits

Spanish bank BBVA reported record profits for 2022, attributing the increase to a jump in lending income and a strong performance in Mexico.

Net profit of 6.42 billion euros ($6.98 billion) for the full year was higher than analysts’ expectations.

Chairman Carlos Torres Vila told CNBC that he now expects lower growth than 2022 “but still growth.”

BBVA shares were trading 3.6% higher around midday London time.

– Jenny Reid

Inflation in the euro area falls for the third month in a row as energy prices continue to fall

Inflation in the euro area came in at 8.5% in January, according to preliminary data published on Wednesday.

The 20-member region has seen significant price increases in 2022 after Russia’s invasion of Ukraine pushed up energy and food costs across the bloc. However, inflation began to moderate in late 2022, marking two consecutive months of a decline in headline levels. In December, the rate was recorded at 9.2%.

-Silvia Amaro

Major central banks are set to signal interest rate slippage

The Federal Reserve Building is seen before the Federal Reserve Board is expected to signal plans to raise interest rates in March as it focuses on fighting inflation in Washington on January 26, 2022.

Joshua Roberts | Reuters

That US Federal Reserve, The European Central Bank and Bank of England all are expected to raise rates again this week as they make their first policy announcements in 2023.

Economists will be watching policymakers’ rhetoric closely for clues about future rate hikes this year as the three major central banks try to create a soft landing for their respective economies without allowing inflation to regain momentum.

That the market is pricing in a 25 basis point hike from the Fed on Wednesday, but the key question is what the Federal Open Market Committee will indicate about further rate hikes in 2023.

Meanwhile, 50 basis point hikes from the ECB and BOE are expected on Thursday.

Read the whole story here.

– Elliott Smith

Stocks on the move: Husqvarna up 6.2%, QinetiQ down 4.2%

Swedish seller of outdoor machinery Husqvarna was the top gain after the open, up 6.2%, despite reporting a higher operating loss for the fourth quarter. Adjusted for items including a restructuring, however, the loss has narrowed.

At the bottom of the Stoxx 600 index, British defense company QinetiQ fall 4.2 per cent

Germany reinsurance Hanover Rueck fell a similar amount after reporting higher full-year results that were in line with its previous forecast.

– Jenny Reid

European markets open higher as investors prepare for the next Fed hike

Europe’s Stoxx 600 rose 0.3% in early trade, with travel stocks up 0.9% and financial services up 0.8%.

Britain’s FTSE 100 was up 0.25%, France’s CAC 40 was up 0.17% and Germany’s DAX was up 0.1%.

The start of the year’s rally has fizzled, but European markets still managed to climb 6.72% through January.

Wednesday will be dominated by the Federal Reserve’s monetary policy announcement, where an increase of 25 basis points is expected, as well as hints about its future development and assessment of the US economy.

– Jenny Reid

European markets: Here are the opening calls

European markets are headed for a higher open on Wednesday as investors focus on the US Federal Reserve’s latest monetary policy announcement today.

Britain’s FTSE 100 the index is expected to open 10 points higher at 7,781, Germany’s DAX 30 points higher with 15,154, France’s CAC up 10 points to 7,096 and Italy’s FTSE MIB up 75 points to 26,721 according to data from IG.

The earnings come from Vodafone, GSK and Novartis. The main data releases in Europe on Wednesday are flash eurozone inflation figures for January.

—Holly Ellyatt

China’s factory activity contracts again

China’s factory activity in January signaled a further decline from previous readings, albeit at a slower pace, marking the sixth consecutive monthly decline.

The Caixin manufacturing Purchasing Managers’ Index for January came in at 49.2 on Wednesday, a slightly higher reading than December’s 49.0 but still missing Reuters expectations of 49.5

“Both manufacturing supply and demand continued to shrink last month. Fallout from the pandemic was a drag on production and sales,” Caixin reported in the press release.

– Lee Ying Shan

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