ECB meeting, democratic confusion, green bonds, Ford


By Peter Nurse – European Central Bank meets during busy week for central bankers. Across the Atlantic, Democrats are struggling to agree on how to fund their hefty spending program, as businesses increasingly look to the green sector for fundraising . Wall Street is expected to open higher as the earnings season continues, with Ford shining as the crude market pulls back after a surge in US stocks. Here’s what you need to know about the financial markets on Thursday, October 28.

1. ECB then with central bankers in focus

The European Central Bank meets later Thursday, in what has been a busy week for central bankers around the world, amid mounting pressure to act to tackle soaring prices.

The European Central Bank will keep its policy unchanged at 7.45 am ET (11.45 GMT), and President Christine Lagarde is expected to prepare the ground for the cancellation of its asset purchase program at her December meeting.

However, she is likely to point out once again that the ECB is in no rush to raise interest rates, even with inflation climbing at the fastest rate since 2008 and with some of its peers already rising. their rates or are considering doing so.

Earlier Thursday, the Bank of Japan kept its interest rates and asset purchase plans unchanged, but lowered its outlook for economic growth and inflation. In addition, the Reserve Bank of Australia chose not to defend its bond yield target, raising expectations for its November policy meeting on Tuesday.

The Bank of Canada kept its overnight key rate at 0.25% on Wednesday and announced it was ending its bond buying program. He also signaled that he could raise interest rates as early as April 2022.

2. Democrats grapple with spending bill

Democrats in the House and Senate could not agree on how to pay for the party’s proposed massive spending bill on Wednesday.

This follows the head of the House Tax Drafting Committee who said a proposal to impose a tax on billionaire assets was dropped during negotiations over tax measures to foot the bill.

President Joe biden will now go to Capitol Hill on Thursday, Reuters reported, to try to get an agreement, or at least a cadre of one, on his broad spending plan ahead of his departure for a Group of 20 leaders meeting in Rome, followed of the United Nations Climate Summit in Scotland.

Its struggle to implement its legislative agenda has raised doubts about the ability of the United States to lead the world in the fight against climate change or the post-pandemic economic recovery.

3. Stocks on the rise; Ford shines

US stocks are expected to open higher, continuing the strong tone generated by a largely positive earnings season, with Ford poised to shine.

At 5:10 am ET (0910 GMT), Dow Jones futures were up 50 points, or 0.1%, S&P 500 futures were up 10 points, or 0.2%, and Nasdaq futures were up 100 increased by 75 points, or 0.5%.

Ford stock traded pre-market up 9% after the auto giant reported higher-than-expected third-quarter profit on Wednesday night and raised its earnings forecast for the whole of the year. year, as strong demand for its trucks helped offset the blow from a global semiconductor shortage.

The flood of profits is expected to continue on Thursday, with iPhone maker Apple (NASDAQ: AAPL), the world’s largest company, and online retail giant Amazon (NASDAQ: AMZN) in the spotlight.

Investors will also take a close look at the first estimate for the annualized third quarter gross domestic product growth. The release is expected to show slower growth to 2.7%, its slowest pace in more than a year and down from 6.7% growth in the previous quarter, as bottlenecks on the side supply and Covid-19 infections weighed heavily.

4. The green show flies away

Companies are under increasing pressure from investors to improve their green credentials and have started to respond by issuing environmental, social and governance bonds to raise funds for low carbon projects.

Investment in these green bonds is expected to double to $ 1 trillion for the first time in a single year by the end of 2022, according to a survey by the Climate Bonds Initiative on Thursday.

The London-based nonprofit also predicts green bond issuance will hit a record $ 500 billion this year, up from $ 297 billion last year.

5. Crude suffers consecutive losses on US stocks, Iran talks

Oil prices fell on Thursday, falling for the second day in a row after official figures showed a surprisingly large increase in US crude oil inventories last week.

As of 5:10 a.m. ET, U.S. crude futures were down 0.6% to $ 82.19 a barrel, hitting a one-week low, after falling 2.4% on Wednesday. Brent futures fell 0.7% to $ 83.30 a barrel, falling to its lowest level in two weeks after falling more than 2% in the previous session.

U.S. crude inventories rose 4.3 million barrels last week, the US Department of Energy said on Wednesday night, more than double the expected 1.9 million barrels gain and well above the 2.3 million barrels suggested by the industry funded industry American Petroleum Institute Tuesday.

The negative sentiment was added to news from Iran’s top nuclear negotiator that Tehran is set to resume talks to revive its 2015 nuclear deal by the end of November. Iran is seeking to lift US sanctions banning the sale of its oil to the world, and the last time the parties met was in June.

European natural gas prices also fell on Thursday after Russian President Vladimir Putin ordered Gazprom (MCX: GAZP) to focus on filling its European storage sites from November 8, a day after completing the process in Russia.

This decision “will create a more favorable situation on the European energy market,” Putin said at a meeting broadcast on state television on Wednesday.

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