DE30: Europe stressed by Powell and Yellen remarks

• Markets in Europe lower after Powell and Yellen comments

• BoE and SNB raise interest rates as expected

• Rheinmetall hits new historic highs

Markets in Europe reacted with declines to yesterday's FOMC interest rate decision and Powell's comments themselves. Nevertheless, it seems that the reason for the falls was not the decision itself, but Janet Yellen's statement, who commented negatively on the idea of implementing a 'blanket' deposit guarantee scheme. Today, investors' attention focused on the decisions of other central banks, including the BoE and the SNB. After the US session opens, we will know data on unemployment claims, home sales and natural gas inventories, among others. 

The mood in Europe during Thursday's trading session is mostly negative. Source: xStation 5

• SNB raises interest rates to 1.5%, in line with expectations from 1.5%. As can be seen, the SNB did not decide to raise less or hold back due to Credit Suisse's problems. The SNB indicates that the decisions taken have prevented a crisis. The SNB indicates that further increases may be possible. Inflation this year is expected to be 2.6%. At 2.0% in 2024. The franc strengthened after the decision. The shares of Credit Suisse (CSGN.CH) and UBS (UBSG.CH) lost nearly 4%.

• The mood in the sector was also spoiled by yesterday's comments from US Treasury Secretary Janet Yellen, who made a negative comment on the idea of implementing a 'blanket' deposit guarantee scheme. Apart from the previously mentioned Swiss banks, almost all institutions in the sector in Europe came under downward pressure. The shares of Commerzbank (CBK.DE) and Deutsche Bank (DBK.DE) lost nearly 2%.

• The announcement of new arms orders (including for 100 Boxer tanks for Australia) strengthened sentiment around Rheinmetall (RHM.DE), whose shares are hitting new historic highs. In the background, the plan to set up a tank production plant in Ukraine persists all the time. The company's shares are up nearly 1.6% today.

Company performance drivers presented at the press conference on 16 March 2023. Source: Rheinmetall

Today's sentiment on the German DE30 is relatively mixed. Contracts are holding close to yesterday's closing levels and all the while holding the barrier zone set by the 78.6% Fibo elimination. A breakout below/above this structure could provide clues to investor sentiment in the market. Source: xStation 5