- Morning Bid: Soft landing swings into view

Brigid Riley provides a preview of the upcoming day in European and global markets. Following Wednesday’s 25 basis point hike, it appears that the most aggressive U.S. hiking cycle in a generation may be coming to an end. This sentiment is reflected in the market’s response. Traders in Asia reacted positively to Jerome Powell’s statement that the Fed no longer expects a U.S. recession, resulting in stock gains and a decline in the value of the dollar. Now, all eyes are on Christine Lagarde and the European Central Bank, which is expected to announce an additional quarter of a percentage point hike later today. The focus will be on Lagarde’s tone and language, as it will provide insight into future actions and potentially impact the euro and the direction of the dollar. Last week, markets were surprised when council member Klass Knot expressed doubt about the need for further hikes beyond July. On Friday, the Bank of Japan will make its decision, which is considered the most unpredictable central bank decision of the week. European and U.S. futures are both up 0.3%. In terms of earnings, companies such as Renault, TotalEnergies, L’Oreal, Intel, Ford, MasterCard, and McDonald’s will be reporting. Chinese stocks experienced a boost due to stimulus hopes, with the Hang Seng Index up 1.4% and its tech subindex gaining 3%. Property stocks also saw a significant increase. Key developments that could impact the markets today include the ECB rate decision, U.S. preliminary Q2 GDP numbers, U.S. initial jobless claims, and U.S. June durable goods data.