European Markets Set to Slip as Investors Watch Inflation, Monetary Policy
overnight as investors reacted to higher-than-expected Chinese consumer and producer inflation readings, with the latter surging 8.3% year on year as the country battles to contain its worst Covid-19 wave since the start of the pandemic.progressed through the first round of voting in the French presidential election and will enter a tightly contested run-off on April 24.Investors will also be keeping an eye on.
European Central Bank policymakers will meet in Frankfurt on Thursday to discuss their next monetary policy move, faced with the tough task of weighing surging consumer prices against downward pressure on economic growth from the war in Ukraine. Beat Wittmann, chairman of Zurich-based Porta Advisors, told CNBC on Monday that the impending withdrawal of central bank liquidity, the growth and corporate earnings outlook and investor sentiment do not provide support for European risk assets in the near future.
"All these trends are either topping or are really negative, and depending on the war developments, inflation will be persistent and even spike, and central banks are very sharply focused on inflation and they have been lagging behind," Wittmann said. "Therefore, I expect continued draining of liquidity, rising interest and inflation rates, and so far we've had disruptions only on the supply side. It might spill over on the demand side, but that's depending on developments in the war in Ukraine, and that can be expected to be prolonged in any case."for exclusive insights and analysis, and live business day programming from around the world.
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