Increased fears of a rapid spread of the Corona Delta variant caused a brief wave of heavy selling in Europe. The announcement of the European Central Bank's (ECB) strategy adjustment, which gives it flexibility to stick to its expansionary monetary policy, also failed to inspire the stock markets at first. The European benchmark index Euro STOXX 50 went out of the day's business with a loss of -2.13% at 3,991.66 points. The picture was similar on the other European stock exchanges. On the New York Stock Exchange, the indices followed the negative guidance from Europe. The Dow Jones Industrial lost in the meantime almost -1.5% and then closed at 34,421.93 points (-0.75%). The market-wide S&P 500 fell by -0.86% to 4,320.82 points and the tech selection index Nasdaq 100 ended Thursday -0.6% lower at 14,722.14 points. At the same time, the yield on 10-year US Treasury bonds fell back to 1.25%, its lowest level in five months.
In Asia, the stock markets show this morning predominantly a negative trend. In Tokyo, the 225-value Nikkei index, against the backdrop of the first Olympic “ghost games”, temporarily fell by about -2%, closing -0.86% lower.
As part of the strategy review, the European Central Bank (ECB) decided to raise its inflation target and tolerate a limited overshooting of the target. In the medium term, the ECB wants to target an inflation rate of 2%, with a “symmetric target that could imply a temporary period in which inflation is moderately above the target.” Previously, the wording was “below but close to 2% over the medium term.” While European equity indices came under pressure, the euro benefited and the yield on German ten-year government bonds reached a three-month low of -0.34%. Another important point in the ECB's strategy adjustment is climate protection. The ECB will also increasingly incorporate aspects of climate protection into its monetary policy operations. According to ECB President Christine Lagarde, for example, issuers of corporate bonds that the ECB accepts or buys as repo collateral will have to provide information on the sustainability of the business model.
Japan's central bank is likely to lower its growth outlook at the end of next week. Against the backdrop of the renewed emergency in the capital Tokyo due to rising Covid-19 infection figures and a slow vaccination campaign, the anticipated recovery in the world's third-largest economy is likely to be weaker. Most recently, the Bank of Japan forecast GDP growth of +4.0% for the fiscal year ending March 2022. At the same time, the central bank may revise its consumer inflation forecast for this fiscal year upward due to higher energy costs.
|08:00||UK||Industrial Production (May, m/m)||-1.3%|
|08:45||FR||Industrial Production (May, m/m)||-0.1%|
|10:00||IT||Industrial Production (May, m/m)||+1.8%|
|12:00||EZ||ECB President Lagarde speech|
Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi, +41 44 250 78 59, E-Mail: firstname.lastname@example.org
Source: LGT Bank (Switzerland) Ltd.
Risk Disclosure (Disclaimer)
This publication is an advertising material / marketing communication. This publication is for your information only and is not intended as an offer, solicitation of an offer, or public advertisement to buy or sell any investment or other specific product. Its content has been prepared by our staff and is based on sources of information we consider to be reliable. However, we cannot provide any confirmation or guarantee as to its being correct, complete and up to date. The circumstances and principles to which the information contained in this publication relates may change at any time. Information that has been published should therefore not be understood as implying that no change has taken place since its publication or that it is still up to date. The information in this publication does not constitute an aid for decision-making in relation to financial, legal, tax-related or other consulting matters, nor should any investment decisions or other decisions be made on the basis of this information alone. It is recommended that advice be obtained from a qualified expert. Investors should be aware that the value of investments can fall as well as rise. Positive performance in the past is therefore no guarantee of positive performance in the future. Investments in foreign currencies are also subject to fluctuations in exchange rates. We disclaim all liability for any loss or damage of any kind, whether direct, indirect or consequential, which may be incurred through the use of this publication. This publication is not intended for persons subject to legislation that prohibits its distribution or makes its distribution contingent upon an approval. Any person coming into possession of this publication shall therefore be obliged to find out about any restrictions that may apply and to comply with them. In line with internal guidelines, persons responsible for compiling this report are free to buy hold and sell the securities referred to in this report.