Slower rate hikes in Europe? Officials at the European Central Bank (ECB) are mulling a slower pace of rate hikes than the 50-basis point increases for February and March that ECB President Christine Lagarde penciled in last month, Bloomberg reports, citing unnamed bank officials it says have knowledge of the discussions. The ECB remains likely to stick to a 50-bps hike in February but support is gaining ground for a 25-point increase in March, said the officials. Cooler recent inflation data, falling natural gas prices, and hints from the US Federal Reserve that it could start to slow its tightening cycle are giving European policymakers more room to breathe. Like the US Fed, the ECB doesn’t want to be seen as going soft on inflation, but “steps may become smaller as necessary as we (ECB) find the level appropriate to bring the inflation down to 2%,” said board member Martins Kazaks.

Looks like some of Lagarde’s staff have doubts: More than 40% of 1.6k staff surveyed by the European central bank’s trade union have “no” or “low” trust in Lagarde and the rest of the ECB board to manage policy, while more than two-thirds said their trust had been damaged by recent developments on inflation and the failure of the ECB to raise their pay in line with it, Reuters reports

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Bad times for investment banks as 4Q earnings roll in: Goldman Sachs’ earnings declined a staggering 67% y-o-y in 4Q 2022 to register USD 1.3 bn, the bank’s financials showed yesterday, with the news triggering a 6% fall in its shares. The drop came on the back of a fall in dealmaking, a decline in the revenues of the firm’s asset and wealth management, and rising costs. Goldman Sachs’ operating expenses shot up 11% y-o-y in 4Q 2022 while revenues dipped 16%.

Morgan Stanley was the relative standout: The firm’s shares closed up more than 6% yesterday after it reported (pdf) a smaller-than-expected 40% y-o-y slowdown in its 4Q 2022 earnings, which dipped to USD 2.2 bn. Its results were buoyed by higher wealth management revenues that helped the firm partly offset a sharp 49% decline in investment banking revenues to USD 1.25 bn.

The losses reflect a wider slowdown in investment banking last year, which has seen Wall Street banks slash their workforces and streamline operations. JPMorgan Chase, Bank of America, and Citigroup on Friday all reported 4Q investment banking revenues down more than 50% on the year before, the Financial Times reports. Dealmaking, which is the main source of revenue for investment banks, took a hit in 2022 at the hands of higher interest rates and a weakening global economy, Reuters notes.

	EGX30	15,982	+0.9% (YTD: +9.5%)
	USD (CBE)	Buy 29.48	Sell 29.62
	USD at CIB	Buy 29.53	Sell 29.63
	Interest rates CBE	16.25% deposit	17.25% lending
	Tadawul	10,683	-0.4% (YTD: +2.0%)
	ADX	10,273	+0.1% (YTD: +0.6%)
	DFM	3,358	+0.7% (YTD: +0.6%)
	S&P 500	3,991	-0.2% (YTD: +4.0%)
	FTSE 100	7,851	-0.1% (YTD: +5.4%)
	Euro Stoxx 50	4,174	+0.4% (YTD: +10.0%)
	Brent crude	USD 86.66	+2.6%
	Natural gas (Nymex)	USD 3.59	+4.9%
	Gold	USD 1,909.90	-0.6%
	BTC	USD 21,279	+0.4% (YTD: +29.1%)

THE CLOSING BELL-

The EGX30 rose 0.9% at yesterday’s close on turnover of EGP 3.14 bn (85.7% above the 90-day average). Regional investors were net sellers. The index is up 9.5% YTD.

In the green: QNB Al Ahli (+5.7%), Ibnsina Pharma (+4.4%) and Heliopolis Housing (+4.4%).

In the red: Alexandria Containers and Cargo (-2.6%), Abu Qir Fertilizers (-2.0%) and Credit Agricole Egypt (-1.3%).

Asian markets are largely up in early trading this morning and futures suggest European markets will also open largely in the green. It’s a different story on Wall Street, where benchmark indices look set to open in the red later on today.