Market Spotlight: Key Quotes From Fed, BOE & ECB at Sintra


Sintra Exit With the ECB’s annual Sintra Forum coming to an end, it’s worth taking a look around as we’ve heard a lot of key information that traders should consider. Fed Chairman Powell, ECB chief Lagarde and BOE Governor Bailey each gave their key insights into their respective domestic economies and the global economy alike, giving their perspective for monetary policy as well as their general thoughts on markets soon. Key Quotes from the Powell Meetings: “We understand better how little we understand about inflation.” Powell: “What we don’t know is whether we’re going to go back to something that looks more or less like what we had before – we suspect it’s going to be some kind of mix. We’re learning. To handle it.” Bailey: “It’s like you’re dealing with a series of big supply shocks with no air gap between them, which of course feeds into expectations. Put them all together, they’re not temporary in the traditional sense of the term.” Lagarde: “There are forces that have been released as a result of the pandemic as a result of this massive geopolitical shock we are facing now that will change the image and the landscape in which we operate.” Powell: “Is there a risk that we will go too far? There is certainly a risk. The biggest mistake to make, so to speak, would be to fail to restore price stability.” Inflation Timos ParamountWhat is very clear from these comments, and the tone of the meetings in general, is the level of concern about inflation and the emphasis on the need for tension. This overall outlook clearly explains the heavy drop we’ve seen through risky assets this week. With central bankers showing little sign of withdrawing from aggressive tightening approaches (well reflected in the last quote in particular), the near-term outlook for stock markets seems vulnerable to further deterioration.Technical ViewsMSCI World IndexThe MSCI World Index has been grinding steadily to lower this. year, reflecting the sadder economic outlook affecting global stock prices. Currently, the index sits in the lower part of the bear channel, held by support at the 58.62 level. If this level breaks, the next support to score is down at the 54.83 level. On the upside, bulls should see a break of the 61.36 level to influence a change of view soon.



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