Financial Markets Daily Report13 juny 2022
The upside surprise in the US CPI figure for May led to a sell-off session on Friday as investors reinforced their bets for additional 50bp interest rate hikes from the Federal Reserve beyond the June and July meetings. Headline inflation accelerated to 8.6% y/y while core inflation ticked down to 6.0%.
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- The upside surprise in the US CPI figure for May led to a sell-off session on Friday as investors reinforced their bets for additional 50bp interest rate hikes from the Federal Reserve beyond the June and July meetings. Headline inflation accelerated to 8.6% y/y while core inflation ticked down to 6.0%.
- In this context, sovereign bond yields rose markedly, with the 2-year US Treasury bond rising above 3% for the first time since 2008, and euro area peripheral spreads widening. Stock indices declined across the board.
- Elsewhere, the US dollar strengthened against advanced economies' currencies and the euro traded slightly above $1.05. In commodity markets, Brent prices declined modestly after China imposed new COVID lockdown measures.
- This week the focus will be on the Federal Reserve, Bank of England and Bank of Japan meetings (Wednesday, Thursday, and Friday respectively).