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Peaks in systemic stress generally result in recession and lower inflation down the line. So, the ECB's work will be done if financial conditions continue to tighten and economic activity contracts.

Recent events have had an impact on three of Europe's most important stock markets, but don't dismiss the region.

The central bank is trying to balance concerns about financial stability and inflation.

The ECB continues to fight against inflation and seems unperturbed by the market turmoil of the last few days. Dropping forward guidance, lowering inflation projections, and a growing awareness that the tightening so far can have adverse effects all suggest that today's meeting probably marks the final phase of ECB tightening.

Two of the largest Europe-focused ETFs have brought in over $6 billion this year.

A 50bp rate hike next week looks like a done deal. As regards sentiment indicators, consumer confidence remains low and actual assessment components are still weak.

When covering an ETF or any stock for that matter, it is important to look beyond only macros. Instead, one should go into detail about the maximum number of factors including the positioning of Europe relative to the U.S. and emerging markets.

Economists expected the U.S. economy to have added 185,000 jobs last month, following the 223,000 added in December. Forecasts also had the unemployment rate increase from 3.5% to 3.6%.

Headline inflation continues its fast decline and dropped to 8.5% in January, while core inflation remains stubbornly high at 5.2%. Lacking German inputs, these numbers are tricky to interpret, but for the ECB, high core inflation will be enough to hike by another 50bp tomorrow.

In 2023, many EU sectors will see diminishing growth due to a weak economy. Manufacturing, staffing, and construction are likely to face a small decline though not all sectors will shrink.