Financial Markets Daily Report

Financial Markets Daily Report
14 February 2022

Investors closed last week trading cautiously, increasing their bets that the jump in inflation is likely to force central banks across advanced economies to deliver a more aggressive withdrawal of monetary stimuli. Financial markets are pricing in by yearend more than 150 bp hikes in the US and more than 50 bp hikes in the eurozone.

FMDR
  • Investors closed last week trading cautiously, increasing their bets that the jump in inflation is likely to force central banks across advanced economies to deliver a more aggressive withdrawal of monetary stimuli. Financial markets are pricing in by yearend more than 150 bp hikes in the US and more than 50 bp hikes in the eurozone.
  • Sovereign bond yields continued to rise across Europe, with spreads in the public debt of southern countries widening further. In addition, stocks fell in both sides of the Atlantic, reversing some of the gains of previous sessions.The Brent price rose notably after the US authorities warned that a Russian invasion of Ukraine could come within days.
  • The key data releases this week include the ZEW survey for February in Germany (Tuesday), CPI inflation for January in China and retail sales and industrial production for January in the US (Wednesday). The Fed will also publish the minutes of its January meeting on Wednesday.
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