KBC Market Research Desk
KBC Bank
European shares lose up to 1% after opening higher. Sentiment gradually soured throughout the day. S&P downgrading several Italian banks and profit taking after an impressive 3‐day bull run can explain the move.
S&P downgraded 18 Italian banks saying that economic prospects in Italy are likely to be weaker than previously anticipated, which will erode banks’ asset quality and profitability and may lead to high credit losses over the next two years.
German consumer confidence is set to start the new year on a strong note, hitting its highest level in eight years, on hopes economic expansion in Europe’s largest economy will accelerate in the coming months, a sentiment survey showed this morning.
Reuters reports that ECB officials, who spoke on condition of anonymity, said that the ECB could require central banks in countries such as Greece or Portugal to set aside extra money or provisions to cover potential losses from any bond‐buying, reflecting the riskiness of their bonds. Such a move could help persuade a reluctant Germany to back plans to buy state bonds.
Later today, Fed Evans, Williams and Lacker are scheduled to speak. They are the first governors to bring more insight on this week’s FOMC decision.
This non-exhaustive information is based on short-term forecasts for expected developments on the financial markets. KBC Bank cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct or consequential loss arising from any use of this document or its content. The document is not intended as personalized investment advice and does not constitute a recommendation to buy, sell or hold investments described herein. Although information has been obtained from and is based upon sources KBC believes to be reliable, KBC does not guarantee the accuracy of this information, which may be incomplete or condensed. All opinions and estimates constitute a KBC judgment as of the data of the report and are subject to change without notice.
Recommended Content
Editors’ Picks
EUR/USD holds firm above 1.0700 ahead of German inflation data
EUR/USD trades on a firm footing above 1.0700 early Monday. The pair stays underpinned by a softer US Dollar, courtesy of the USD/JPY sell-off and a risk-friendly market environment. Germany's inflation data is next in focus.
USD/JPY recovers after testing 155.00 on likely Japanese intervention
USD/JPY is recovering ground after crashing to 155.00 on what seemed like a Japanese FX intervention. The Yen tumbled in early trades amid news that Japan's PM lost 3 key seats in the by-election. Holiday-thinned trading exaggerates the USD/JPY price action.
Gold price bulls move to the sidelines as focus shifts to the crucial FOMC policy meeting
Gold price (XAU/USD) struggles to capitalize on its modest gains registered over the past two trading days and edges lower on the first day of a new week, albeit the downside remains cushioned.
Ripple CTO shares take on ETHgate controversy, XRP holders await SEC opposition brief filing
Ripple loses all gains from the past seven days, trading at $0.50 early on Monday. XRP holders have their eyes peeled for the Securities and Exchange Commission filing of opposition brief to Ripple’s motion to strike expert testimony.
Week ahead: FOMC and jobs data in sight
May kicks off with the Federal Open Market Committee meeting and will be one to watch, scheduled to make the airwaves on Wednesday. It’s pretty much a sealed deal for a no-change decision at this week’s meeting.