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On Wednesday, many Federal Reserve officials stressed the need for further rate hikes because of concerns that a strong labor market could pave the way for inflation. As the stock market closed Wednesday, the Dow Jones Index (US30) decreased by 0.61%, and the S&P 500 Index (US500) lost 1.11%. The Nasdaq Technology Index (US100) fell by 1.68%.

Federal Reserve representative Christopher Waller said Wednesday that the fight to lower inflation might be long, and a longer-term interest rate hike may be needed.

Google held an event to launch its new "Bard" artificial intelligence chatbot, but the AI chatbot reportedly gave inaccurate answers just before the event. The decline in Google's quotes pulled the entire tech sector with it. In response to the glitch, Google said it would use external feedback and its own testing to ensure that Bard's answers met the high bar for quality, safety, and validity of real-world information.

Uber Technologies Inc (UBER) had an outstanding performance, closing up more than 5% after the company reported unexpected fourth-quarter earnings and optimistic forecasts.

Equity markets in Europe traded yesterday without a single dynamic. Germany's DAX (DE30) gained 0.60%, France's CAC 40 (FR40) fell by 0.18%, Spain's IBEX 35 index (ES35) added 0.67%, Britain's FTSE 100 (UK100) closed up by 0.26% on Wednesday.

According to Governing Council spokesman Martins Kazaks, the European Central Bank should raise interest rates to levels that would "significantly" limit the economy. The head of Lithuania's central bank also added that investors should pay attention to comments made by President Christine Lagarde, who promised that the ECB would "stay the course" to return inflation to its medium-term target of 2%. At the same time, the politician believes there is no reason to pause or stop rate hikes after March's 0.5% rate hike.

The FTSE 100 reached a new all-time high, boosted by optimistic reports from oil giants BP and Shell for the fourth quarter of 2022 and new optimism about the Fed's short-term reversal. The British company Barratt developments reported a +15.9% rise in profit for the half-year, and the National Institute of Economic and Social Research (NIESR) added positive sentiment suggesting that the UK may be able to avoid a major recession.

Oil prices rose yesterday, mainly due to supply chain problems in Turkey caused by the earthquake. In addition, inventory data from the American Petroleum Institute (API) showed a deterioration of -2.18 million barrels rather than an increase of a similar amount.

Asian markets also traded flat yesterday. Japan's Nikkei 225 (JP225) decreased by 0.29%, China's FTSE China A50 (CHA50) lost 0.41%, Hong Kong's Hang Seng (HK50) ended the day down by 0.07%, India's NIFTY 50 (IND50) increased by 0.85%, and Australia's S&P/ASX 200 (AU200) ended the day up by 0.35%.

The five-year term of the head of the Bank of Japan, Mr. Kuroda, expires on April 8, and the choice of his successor will probably affect how quickly the Bank of Japan will be able to phase out the stimulus. Government nominees are due to be submitted to parliament at the end of this month. Earlier this week, it was reported that the Japanese government had approached Bank of Japan Deputy Governor Masayoshi Amamiya about the possibility of replacing current Governor Haruhiko Kuroda. Among other candidates, Hiroshi Nakaso, the former deputy governor of the Bank of Japan, who has international experience, speaks fluent English, and has close contacts with foreign central banks, is widely considered. Amamiya, like Kuroda, is a fan of soft monetary policy, while Nakaso is considered a more "hawkish" candidate who can lead the Bank of Japan down the path of policy normalization.

• S&P 500 (F) (US500) 4,117.86 −46.14 (−1.11%)
• Dow Jones (US30) 33,949.01 −207.68 (−0.61%)
• DAX (DE40) 15,412.05 +91.17 (+0.60%)
• FTSE 100 (UK100) 7,885.17 +20.46 (+0.26%)
• USD Index 103.39 +0.06 (+0.06%)
   

Important events for today:

• German Consumer Price Index at 09:00 (GMT+2);
• UK Monetary Policy Report Hearings at 11:45 (GMT+2);
• Eurozone Economic Forecasts (m/m) at 12:00 (GMT+2);
• US Initial Jobless Claims (w/w) at 15:30 (GMT+2);
• US Natural Gas Reserves (w/w) at 17:30 (GMT+2).

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