The investment package in Germany and the associated ‘abandonment of the debt brake’ has caused a lot of movement in the eurozone bond market. Meanwhile, central banks have to manage the balancing act between slowing economic growth and rising inflation. Dániel Bebesy, Fixed Income Portfolio Manager at Erste Asset Management Hungary, talks in an interview about the recent central bank meetings and their impact on the bond market.
Even though the ECB recently left its key interest rate unchanged, central banks are increasingly signaling an inclination to cut interest rates for the first time. At the same time, the indicators point to good economic growth at a global level. These are positive signals for the stock markets.
While equities have recently risen, yields on the bond market have weakened. The markets are being supported by increasing hopes of a “soft” landing for the economy. What are the chances of this scenario?
Inflation data in Europe recently showed a surprisingly significant slowdown. The decline in energy prices in particular had a dampening effect. Read our latest blog post to find out about the current inflation in the individual EU countries.
The volatility of bonds has increased significantly and is clearly higher than that of equities. What are the reasons for this difference in development?
Most recently, central banks have signaled a somewhat less sharpish stance, as an effect of the rapid key rate hikes on the monetary environment has already become visible. However, recent economic data are dampening hopes for a rapid decline in inflation, as Chief Economist Gerhard Winzer explains in his market commentary.
The current crisis of confidence continues to dominate market activity and has significantly increased uncertainty about the future development of economic indicators. Read more in the current market commentary by Chief Economist Gerhard Winzer.
Central banks and markets are in a calibration phase. The question is how many key rate hikes are needed to be able to confidently expect inflation to fall in the direction of 2%. Particular attention is therefore once again being paid to the US inflation data, which will be published today, Tuesday.
At present, indicators on inflation and economic activity are competing to determine which of the two categories is more important for the financial market. Read more in the current market commentary by Chief Economist Gerhard Winzer.
Last week, the Japanese central bank made the last major monetary policy decision of 2022, bringing an eventful year to an end – also from a central bank perspective.
