European markets marginally lower as investors digest central bank announcements

European markets marginally lower as investors digest central bank announcements
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Eurozone borrowing costs rise on ECB rate hike signals

Euro zone bond yields rose after the European Central Bank clearly marked out to investors that interest rates will continue to rise and that no cuts are in sight.

performance in German 10-year bondsConsidered a benchmark for euro zone borrowing, it rose 12 basis points to 2.2% as of 11:30 am Berlin time.

Their 2-year bond yield rose 11 basis points to 2.5%, the highest level since 2008, as Germany’s yield curve inversion hit a new 30-year high.

An inverted yield curve has previously been a predictor of a recession and indicates worsening economic expectations in the near term.

On Thursday, the ECB slowed the pace of rate hikes to 50 basis points, but also announced the start of quantitative tightening in March 2023, saying hikes would continue “significantly at a steady pace.”

He said the inflation forecasts he uses have been revised upwards and do not indicate a return to his 2% target until 2025; but also that he expected a bloc downturn to be “relatively short-lived and shallow.”

—Jennie Reid

European indices have remained resilient despite external shocks, says Euronext CEO

European indices have remained resilient despite external shocks, Euronext CEO Stephane Boujnah told CNBC’s Joumanna Bercetche at the Paris Conference.

Boujnah: European indices have remained resilient despite external shocks

Boujnah discussed recent market volatility, the strength of commodities and primary prices in the UK.

The slowdown in business activity in the euro zone moderates, according to PMI data

Business activity in the euro zone continues to fall, according to the flash composite S&P Global Purchasing Managers’ Index (PMI), but the slowdown is easing.

The PMI rose to a four-month high of 48.8, up from 47.8 in November.

The new data suggests that while a recession is likely, it could be shallower than previously anticipated.

December was the sixth month in which the number fell short of the 50 mark that divides growth and contraction, which is the longest recessionary streak since June 2013.

—Hannah Ward-Glenton

UK business recession is easing, according to PMI data

The recession facing UK businesses has eased slightly in the past month, according to data from the UK’s S&P Global Composite Purchasing Managers’ Index (PMI).

The index unexpectedly rose to 49.0 from 48.2 in November, well above the Reuters economists’ estimate of 48.0.

The services sector led the gains, while British manufacturing continued to fall.

—Hannah Ward-Glenton

Norwegian oil company Aker BP to invest $20.5 billion in new oil and gas projects

Norwegian oil company Aker BP will invest more than 200 billion Norwegian krone ($20.5 billion) to develop oil and gas fields in Norway in the coming years, the company said.

Aker BP was one of several oil companies that worked in Norway to submit project plans for approval before temporary tax benefits expire at the end of the year.

Aker BP is partially owned by BP and is the second largest oil producer in Norway after Equinor.

—Hannah Ward-Glenton

Games Workshop shares rise 12% after announcing the agreement with Amazon

Games Workshop shares soared 12% after the company announced a deal with Amazon to develop one of its games into film and television productions.

The British game maker is best known as the creator of the Warhammer 40,000 miniature war game, which Amazon now has the rights to use for its content services.

—Hannah Ward-Glenton

European markets: here are the opening calls

European markets are expected to open higher on Friday.

Britain FTSE 100 looks around 33 points higher at 7,456, Germany’s DAX is set to jump around 33 points to 14,019 and France’s ACC 40 he is expected to add around 18 points to 6,533. from Italy MY B the index is set to add 32 points to 23,787.

—Hannah Ward-Glenton

CNBC Pro: Morgan Stanley doubles down on Big Tech shares, says it can go as much as 65% higher

Big Tech shares have been hit hard by this year’s sell-off, but Morgan Stanley believes the current weakness in a stock’s share price presents an “opportunity to own one of the highest quality technology platforms around” .

Professional subscribers can read more here.

—Zavier Ong

UBS improves China’s growth outlook for 2023 and lowers forecast for 2022

UBS upgraded its outlook for China’s gross domestic product in 2023 to 4.9%, up from 4.5% previously, according to its chief China economist Wang Tao, citing an earlier and faster reopening in the nation.

Wang said the company expects weaker fourth-quarter GDP for 2022, lowering its full-year forecast to 2.7% from 3.1%, noting weakening November growth with a recent rise in cases of covid.

The firm added that the Central Economic Work Conference will likely prioritize stabilizing growth as well as supportive macro policies for the coming year.

“We expect fiscal policy to remain proactive with a small increase in the headline deficit and a new special LG [local government] bonds, monetary and credit policy to maintain support with continued ample liquidity, but further policy rate cut is unlikely,” Wang said in the note.

—Jihye Lee

Stock futures open lower

Stock futures opened lower as investors pulled out of a second day of selling.

Futures linked to the Dow Jones lost 40 points, or 0.1%.

S&P 500 and Nasdaq 100 futures lost 0.1%.

—Alex Harring

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