Stock markets around the world are anxiously awaiting the US Federal Reserve’s policy meeting on Wednesday this week. It will then be announced to what extent interest rates will be raised again. For investors it is still by no means certain with which step this will happen, after the turmoil in the banking sector in recent weeks. It is also questionable to what extent calm will return to the stock markets this week.
Investors hope that the US central bank will raise interest rates less sharply in order to maintain calm in the financial sector. There was unrest there last week after the collapse of the Silicon Valley Bank (SVB) and the Signature Bank. Those banks had run into problems, among other things, because interest rates in the US have risen sharply recently. Central banks raise interest rates to curb inflation.
High inflation
Fed Chairman Jerome Powell has previously indicated that the battle against high inflation is not yet over. In addition, he would be prepared to raise interest rates more quickly if necessary. But many connoisseurs take into account a small increase of a quarter of a percentage point. Investment bank Goldman Sachs reported last week that it expects the Fed to abandon a hike altogether. The central bank would thus send a signal that the problems in the banking sector pose a greater threat to the economy than the high inflation.
The situation at the Swiss Credit Suisse is closely monitored on the European stock markets. That bank ran into problems due to the collapse of several regional banks in the US. Behind the scenes there was talk on Saturday and Sunday about a takeover. Switzerland’s largest bank UBS, led by former ING CEO Ralph Hamers, seems to be the strongest contender. The Swiss government wants to close the deal quickly, in order to restore calm to the stock markets.
Support applications
In addition to the Fed’s interest rate decision, the Bank of England and the Turkish central bank will announce on Thursday to what extent they will adjust their interest rates. Investors also have to deal with a host of macroeconomic figures, including applications for aid in the US and consumer confidence for the Netherlands and the European Union. Only a few companies are publishing figures this week, including sports brand Nike, internet and games company Tencent and the German energy company RWE.
ABN AMRO will be traded again on the Amsterdam stock exchange from Monday in the AEX, the index of the 25 largest funds on Damrak. Two years ago, the bank was relegated from that indicator. Insurer ASR also returns to the list, the composition of which is reviewed by stock exchange operator Euronext every so often.
