By Marc Jones

LONDON (Reuters – Sterling and euro dropped as the ECB & BoE prepared for rising inflation issues later Thursday. Meanwhile, stock markets turned red after a disappointed status update from Facebook (NASDAQ:).

Europe’s major bourses saw 0.4% drop in early morning ()A 3-day rally was halted by the possibility of a UK interest rate rise in the next three months and a more hawkish ECB. Also, Wednesday’s shocker of 20% drop in Meta’s shares of Facebook owners ended a 3 day rally.

Dollar’s strength was restored by the market defensiveness. Although inflation pressures were impacting bonds, it was easy to believe that the real action would be later with all of the central bank activity.

Forecasts indicate that the Bank of England will raise interest rates by 0.5%, and the UK government is expected to announce a subsidy to energy bills.

Frankfurt: While the European Central Bank won’t likely make any major policy adjustments, recent high inflation figures in eurozone and labor statistics have raised hopes for a more hawkish turn in tone.

Kit Juckes (OTC:), Societe Generale analyst, said “The equity markets took an beating yesterday.” They have not moved this morning but they are still ahead of central banks meetings.

U.S. stocks futures dropped sharply after the disappointing outlook and earnings of Whatsapp company Meta and Facebook’s tech-dominated Nasdaq. The market had lost $200 billion in its value and was now dominated by U.S. shares.

Others social media firms also suffered after the bell. These include Twitter (NYSE;), Pinterest (NYSE;) and Spotify (NYSE.). This was due to a dispute over misinformation about COVID vaccines.

Flynn Zaiger CEO, Online Optimism said that Meta is starting to be understood by investors who are looking at it as an opportunity to invest in their ad platforms.

“Investing In Meta Now looks more like an agreement that you believe the metaverse can replace many of today’s internet consumer experience. (Graphic: Currency markets in 2020, https://fingfx.thomsonreuters.com/gfx/mkt/myvmnjkeypr/Pasted%20image%201643811970966.png)

CLUB 50 PERCENT

Emerging markets were feeling the pressure again, after inflation reached nearly half-way and Russia’s currency wobbled as tensions about Ukraine were intensified by the deployment of 3,000 U.S. soldiers to Eastern Europe.

This happened as oil prices eased, even though OPEC and its allies remained committed to moderate production increases. The U.S. ADP job data was weaker than expected.

To $88.71 per barrel, the price dropped 0.8% or 77c to $0.8 U.S. West Texas Intermediate crude CLc1. The price of a barrel at $87.49 was 0.9% less than it was a year ago.

According to Howie Lee (economist at OCBC Singapore), “This morning’s dip could be a consequence of the shockingly high U.S. ADP Employment print last night. But we believe that the supply squeeze might drive oil prices higher throughout this year.”