Dhara Ranasinghe shows us the market day ahead.

Although the Ukraine crisis might be tempering aggressive rate increases, New Zealand’s recent interest rate increase suggests that central banks are still committed to tighter policies.

On Wednesday, the Reserve Bank of New Zealand raised its rate for the third consecutive time. This move brought key rates up to 1%. The dollar rose to a new one-month high as a result of the aggressive tightening by the Reserve Bank of New Zealand.

The company also announced plans to liquidate its NZ$50billion ($33.82billion) bond portfolios.

Other central bank officials also stated that they were considering rate increases.

On Tuesday, Dave Ramsden, Bank of England deputy governor, stated that he expected to see more tightening. Robert Holzmann (ECB policymaker) is quoted as saying this morning that the ECB may raise rates in summer before ceasing its bond-buying.

However, the outlook for the ECB’s policy is complicated by tensions with Russia and the West over Ukraine. The Europeans were pushed higher by Germany’s refusal to issue Nord Stream 2 certification.

The geopolitical tensions could lead to further inflation.

Markets are currently on a more stable ground while investors wait for new developments. Asian stock markets stabilized overnight while European and U.S. stocks futures remain firmer.

British banks are the top earners. Barclays (LON) reported that its annual profit almost tripled due to falling bad loans charges and the strong performance of its investment bank.

(Graphic: New Zealand’s key rate rises to 1%, https://fingfx.thomsonreuters.com/gfx/mkt/zgvomzwdevd/NZrates.PNG)

Markets should be more informed by key developments on Wednesday

Rio Tinto (NYSE): Full-year Profit Soars On Iron Ore Prices

– German GFK consumer sentiment

WTO General Council holds a two-day meeting

– ECB: board member Frank Elderson;  ECB VP Luis de Guindos speak

– Fed : Altanta Fed president Bostic speaks

Budget South Africa

– US 5-year note auction/2-year floating rate note sale

– US earnings: Lowe’s (NYSE:), Office Depot (NASDAQ:), Molson Coors (NYSE:), eBay

European earnings: Stellantis. Merlin. Avast. Rio Tinto. Iberdrola.