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No signs of misaligned inflation expectations, ECB policymaker says

There are no signs of misaligned market expectations about inflation, European Central Bank policymaker Robert Holzmann says.

The statement was presented on a slide with a speech at the Euromoney conference on Central and Eastern Europe.

In a slide referencing recent rate hikes, Holzmann added that “[p]interest rates will
they must rise significantly to reach levels restrictive enough to ensure a timely return of inflation to the medium-term target of 2%.

— Hannah Ward-Glenton

France’s economy is holding up better than expected and should avoid a hard landing: Bank of France

The French economy is holding up better than expected and should be able to avoid a “hard landing”, Bank of France President Francois Villeroy de Gaulle said on Wednesday.

“Activity in France is showing better resistance than expected,” Villeroy told Radio Classique.

The Bank of France said the French economy likely grew slightly in the final quarter of last year, as business activity picked up following October refinery strikes and the restart of several nuclear power plants.

— Hannah Ward-Glenton

Shares in British insurer Direct Line fell 29% after a profit warning

Shares in Direct Line fell 29% after the British insurer axed its final dividend for 2022, putting it on track for its biggest one-day drop on record.

The company said it experienced a surge in claims during a period of bad weather in Britain in December, which led the insurer to an underwriting loss for the year.

Inflationary pressures and supply chain problems have made vehicle repairs more expensive, while unexpected hot and cold weather has boosted demand, Direct Line said.

“The board recognizes the importance of dividends to our shareholders and continues to take actions to restore balance sheet resilience and dividend capacity as a priority, consistent with our track record of delivering shareholder returns,” CEO Penny James said in a statement.

— Hannah Ward-Glenton

CNBC Pro: This global ETF is the only fund to post gains every year for the past decade

The only stock ETF to have a positive return every year over the past decade was revealed by CNBC Pro.

It is the only fund of nearly 7,000 stock ETFs worldwide reviewed by CNBC Pro to not have a single year of negative returns between January 1, 2013 and December 31, 2022.

It also offered investors a 14% compounded annual growth rate over the same period, significantly higher than broader index-tracking funds, according to Coifin data.

CNBC Pro subscribers can read more here.

— Ganesh Rao

Cryptocurrencies trade higher even as Coinbase announces layoffs

Cryptocurrencies surged after crypto company Coinbase announced plans to cut 20% of its workforce as it looks to conserve cash during the crypto market downturn.

Bitcoin it last traded 1.55% higher at $17,459.63 according to Coin Metrics. Ether gained 1% to $1,337.85.

Other digital coins such as Cronos and Cardano have also made progress.

Chief executive Brian Armstrong said there was “no way” to cut costs and increase the chances of “doing well in every scenario” without cutting headcount.

— Lee Ying Shan, Kate Rooney

CNBC Pro: “Costly mistake: Citi says stop hoarding cash — and reveals two areas to invest in.”

Investors endured a tough 2022, as stocks and bonds fell amid broader market turmoil.

While many have sought refuge in the relative safety of cash, Citi says now is the time to put it to work and outlined two ways to use it for higher returns.

Pro subscribers can read more here.

— Xavier Ong

Coinbase lays off 20% of workforce

Shares of Coinbase rose 6% after the cryptocurrency exchange operator announced plans to cut 20% of its workforce in a bid to cut costs.

The layoffs will affect 950 jobs and mark the company’s second round of layoffs in recent months. In June, Coinbase laid off 18% of its workforce in preparation for a potential recession and crypto winter, saying it had grown “too fast” during the bull market.

Crypto markets have been under pressure following the collapse of FTX, one of the largest operators in the industry.

Coinbase said the new round of layoffs will reduce its operating expenses by 25% for the quarter ending in March, according to a new regulatory filing.

— Kate Rooney, Samantha Subin

European markets: Here are the initial calls

European markets are headed for a higher open as investors brace for more inflation data later this week and US consumer price data for December is due on Thursday.

of the UK FTSE 100 The index is expected to open 26 points higher at 7,720, German DAX 73 points higher at 14,848, France CAC by 29 points to 6,898 and Italy FTSE MIB by 109 points to 25,474, according to IG data.

The released data will include Russian inflation data for December and earnings from British supermarket Sainsbury’s.

— Holly Elliott

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