Noor Capital | Interview with Mohammed Hashad on Dubai TV – February 20, 2023

In an interview on Dubai TV, Mohammed Hashad, Head of Research and Development at Noor Capital and member of the American Association of Technical Analysts, highlighted and commented on the most important developments in financial markets.
ECB’s Upcoming Rate Decision

Asked about the expected scenario for the European Central Bank’s decision to raise interest rates at its next monetary policy meeting versus the scenario that the markets want and prefer, and how the euro might be affected by any of the proposed scenarios, Hashad replied: “I think that for the European Central Bank, it has a lot of time to declare their victory in the battle against inflation”.

ECB, Interest Rates

There are challenges ahead, and such challenges are obvious, most notably the continued rise in wages at significant levels, and then there is some slowdown in inflationary pressures, but with careful consideration, we can find out that inflation measurement in the short term record a decline, but with regard to inflation on the long term, it is still at the -2.4 mark, in other words, it is still too far from the European Central Bank’s target, at 2%, and therefore, Hashad believes that after the next monetary policy meeting by the European Central Bank, the markets may witness a 50 basis point interest rate hike with aiming to combat inflation, and this is clearly in line with the US Federal Reserve’s tendency, which is to keep raising interest rates.

The calm before the FOMC Miniutes

Asked about the state of calm that prevailed financial markets on Monday, and whether this calm results from the announcement of the results and corporate earnings and whether earnings could impact European markets, Hashad replied: “The current calm came as a result of the quiet economic agenda witnessing almost no important data, as we have seen calm in the markets coinciding with the American holiday, but it seems that all markets are greatly anticipating the week that is full of important data, and this week awaits the publication of the minutes of the last meeting of the Federal Reserve, and therefore, the investor must be very cautious ahead of the FOMC minutes as well as other important data during the trading week.

Powell’s Remarks, Latest US Economic Data

Hashad expects that the FOMC minutes will indicate that the Fed will continue to raise interest rates, and will not start cutting interest rates until after witnessing a real decline in the level of demand. All data and indicators indicate that the Fed will continue to raise interest rates and may reach the level of 5%, and we witnessed with the beginning of this February how the US economy added 517,000 jobs, a reading that may not have agreed with the Federal Reserve’s preferences, but Hashad believes that the Fed is continuing to raise interest rates, because the issue is not related to the how much an interest rate hike will be, whether by 50 basis points or 25 basis points, instead it is related to the essential question that is the fundamental cause of confusion in the markets, which can be explained by the following question: “For how long will the interest rate hike continue? Will the rate hike end in 2023 or will the Fed complete the quantitative tightening cycle in 2024?