Financial Markets Daily Report 06 May 2022
Risk-aversion returned to the fore during a volatile session on Thursday, as investors continued to digest recent monetary policy decisions by central banks (Fed, BoE) and took on board disappointing economic data (e.g. the fall in factory orders in Germany and the uptick in new jobless claims in the US).
- Risk-aversion returned to the fore during a volatile session on Thursday, as investors continued to digest recent monetary policy decisions by central banks (Fed, BoE) and took on board disappointing economic data (e.g. the fall in factory orders in Germany and the uptick in new jobless claims in the US).
- The BoE raised its policy rate by 25 bp, in line with expectations, but warned that the UK risks falling into recession. In the euro area, ECB chief economist Philip Lane noted that the timeline to normalize monetary policy is “intrinsically uncertain” while ECB Board member Fabio Panetta said the economic expansion has lost traction.
- In this context, sovereign bond yields rose across the board, while stocks fell notably in the US and Europe. Oil prices continued to march higher, following the confirmation by the OPEC+ to stick to its plan for a gradual rise in supply.
- Today, the focus will be on the US payrolls report for April, with consensus expectations looking for a rise of 380k.