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Daily market commentary: Investors now expect a Fed pivot towards a less hawkish position

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Daily market commentary: Investors now expect a Fed pivot towards a less hawkish position



European Shares

European shares edged higher Friday, despite Asian markets closing mixed due to uncertainty rising at the end the week.

Market sentiment towards riskier assets was put under pressure at the end of the US trading session on Thursday after traders witnessed FOMC officials playing down hopes of a pause or pivot from the Fed’s monetary tightening cycle. The MSCI Asia Pacific index fell 1.05% due to rising covid cases, as well as bond market instability in China.

The mood on the continent seems different today, as traders continue pushing stock prices higher and evaluating the latest speech by Christine Lagarde, President of the ECB, on inflation.

Market volatility is expected to continue to rise today due to the announcement of an increasingly restrictive ECB. This ECB will do whatever it takes in order to tame rising prices (including negatively impacting growth). Stock markets could be at risk.

STOXX-50 is trading below its initial resistance level of 3,920.0pts. If prices break out, they could move to 3,965.0pts.

A failure to clear this level could be…



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