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down…but not out

(Reuters) – Jamie McGeever

Global markets survived two blows from the European Central Bank (ECB) and Federal Reserve Chairman Jerome Powell said on Thursday, Investors were hoping Asia could end a rough week with rare positive news.

ECB raises rates by an unprecedented 75 basis point, Powell hints the Fed will do so again later this month, further proof that central banks remain committed to lowering rates Inflation, regardless of collateral damage.

“We expect to raise rates further because inflation is still too high,” warned ECB President Christine Lagarde, while Powell said “we need to hold on until the job is done. .”

This is after a rate hike 75 from Canada 24 a few hours ago, while the UK has a history of One of the biggest peacetime budgets since a package to tackle the energy crisis suggests that UK monetary policy could be tightened more quickly.

In light of all this, world stocks rose for the second day in a row – the first two days in a row since August, 24-25. Financial stocks were particularly bullish on the prospect of higher interest rates.

Even more surprising is that bond yields were little changed on the day, with gilt yields down from year-ago highs . Perhaps the market can only take so much tightening in a week.

Asian focus on Friday turned to China again. On the data front, consumer and producer price inflation will be released in August, while investors will focus on the development of the crisis at property developer Evergrande.

The troubled conglomerate – the world’s most indebted developer, saddled with more than 300 $1 billion in liabilities – appointed a receiver this week to take over its Hong Kong headquarters.

Key developments Friday that should give the market more direction:

Chinese CPI and PPI (August)

Japanese currency Supply (August)

India Foreign Exchange Reserves

Canada Unemployment (August)

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