ECB raises rates with 50 points, and the markets love it!
Markets getting off
There has been lots of talk and even FUD after the banking collapse of Silicon Valley Bank, and the wobbly situation of Credit Suisse in Europe.
Markets were scared the European Central Bank would shit its pants and wouldn’t go through with the planned rated hike. But the ECB showed strength and went ahead with it. By that move they showed confidence in the banking system and that is all the markets needed!
The markets completely went off on it, with moves above 2 % positive all over the world.
Psychology
This shows once again how irrational markets can react. The higher interest rates brought the banks into trouble and still the reaction is positive to another raise.
It’s all psychology and emotions, more than numbers, especially in the short term.
And that short term needed faith in the system, which is exactly what it has gotten today!
It’s a weird system, but it’s interesting, that’s for sure!
Sincerely,
Pele23
I think this raise had been priced before as there was not a big reaction in EUR/TL rate yesterday.
https://twitter.com/2247710108/status/1636479795457323011
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yes! weird! perhaps there is a delayed reaction? or the sheeple just follow whatever they see as the lead. most likely, it's the second one.. :P