European Shares

Markets slid lower shortly after the opening bell in Europe on Wednesday, despite an optimistic sentiment registered during the Asian trading session, as Traders brace for today’s important ECB meeting. While a 25bp rate hike is now widely anticipated in Europe, all eyes are likely to be on the new bond stability tool the ECB is also expected to unveil today. Details around this unconventional programme will be crucial, as many traders wonder how the ECB can start a new monetary tightening cycle while staying “dovish” buying bonds. If the ECB succeeds in reassuring traders with a solid plan, Market sentiment would be likely to improve significantly towards riskier asset, which could change the trend for the second half of 2022. Until then, we don’t expect any clear directionality on most EU benchmarks, while market volatility should however be on the rise. Today’s decline can be explained by a bearish pressure brought by a higher EUR currency after FX traders welcomed the restart of the Nord Stream pipeline, even if Russia warned about a tight gas output for Europe. Elsewhere, traders are also watching a potential easing in geopolitical tension after Joe Biden announced his intention to have a meeting with Xi Jinping in the next 10 days, as Washington is considering lifting some US tariffs on Chinese goods.

The worst performance is being brought by Milan so far as the FTSE-MIB index trades below the 20,900pts level.

Pierre Veyret– Technical analyst, ActivTrades

The post Daily market commentary: The euro is on the front foot, claiming back some of its losses to the dollar appeared first on LeapRate.