Europe stocks close lower as monetary policy decisions take center stage
European stocks tumbled on Monday as investors reacted to developments regarding the omicron Covid variant and await monetary policy decisions from some of the world's largest central banks...
Yayınlanma: 15 Aralık 2021 21:49
Güncellenme: 23 Aralık 2024 18:44
It will be an important week for monetary policy as the US Federal Reserve, the Bank of Japan, the Bank of England and the European Central Bank make decisions this week.
There is growing expectation and curiosity about super-high inflation and how the central banks will respond. On Friday, US inflation reached its highest level since 1982, but markets were able to recover, with the S&P 500 finishing the week with its best week since February.
In a morning note on Monday, Klaus Baader, Global Chief Economist at Societe Generale, referred to the busy agenda of central banks.
Klaus Baader expects "accelerated contraction and signals by the Fed for an earlier rate hike" and "PEPP (pandemic emergency purchasing program) put on hold by the ECB". He also noted that the Bank of England "reluctantly" maintained its position and saw the Bank of Japan maintain its conciliatory stance.
On Wall Street on Monday, the S&P 500 pulled back as investors remained cautious about how the omicron variant will affect the economy and what the Federal Reserve will reveal on Wednesday.
The UK raised its Covid threat level on Sunday after Prime Minister Boris Johnson warned of a "tidal wave" of Covid cases as a result of the omicron. From this week, all adults in the UK will be able to receive their new immunity boosting dose of vaccines.
"It's clear now that two doses of the vaccine are not enough to provide the level of protection we all need, but the good news is that our scientists are confident that with a third dose, a booster dose, we can all raise our level of protection again," Johnson said.
Johnson confirmed on Monday that at least one patient in the country infected with the new omicron variant has died.
On the European data front, investors will watch the Bank of England's financial stability report and UK stress test results for monetary policy. Bank chairman Andrew Bailey is expected to hold a press conference at 5:30 p.m. London time.
When it comes to individual stock transactions, Credit Suisse announced an overhaul of its board early Monday. Shares tumbled 1.7%.
Meanwhile, Vifor shares rose 18% after it was confirmed that it is in merger talks with Australian company CSL.
