| Abstract [eng] |
The primary goal of this master thesis is to ascertain the impact of central bank sentiments on the performance of financial markets mainly looking at the ECB communications, stock markets and bond markets. This thesis comprises of three parts: analysis of the literature, the examination and results, conclusion, and recommendations. The literature analysis reviews the theory available on the sentiment effect on the performance of financial markets digesting through the framework of central bank communications mainly speeches, press releases and monetary policy effect on financial markets which mostly indicated a positive impact. Furthermore, on the literature analysis, the theoretical research provided more evident and significant impact of bank communications and policy decisions on market dynamics. These studies consist entry demonstrated that speeches, monetary policies and press releases have direct influence on bond yields and stock market behavior. Also, the literature suggests a notable shift in market sensitivity to the post 2008 fiscal crisis which reflects the relationship between central bank policies and financial market responses. After examining the thesis using a quantitative approach with the help of python program, scrapping data from the central bank system website, analyzing the sentiment score. The results revealed a noticeable impact of the central bank sentiment, hence being integral to financial market movements in Europe. The conclusions and recommendations summarize the main concepts of the literature and the findings from the thesis. These findings could be useful to the investors in making decisions, central banks to manage transparency and clarity since it is crucial and could increase market volatility. |
