Financial Markets Daily Report 13 October 2022
Volatility and risk aversion continued to set the tone across markets on Wednesday, with investors taking position ahead of a crucial inflation report in the US later today and the kickoff of the Q3 corporate earnings season on Friday.
- Volatility and risk aversion continued to set the tone across markets on Wednesday, with investors taking position ahead of a crucial inflation report in the US later today and the kickoff of the Q3 corporate earnings season on Friday.
- ECB president Lagarde reiterated the need to continue rising policy rates, making clear that this was the most effective tool to tackle high inflation. In the US, the minutes of the last Fed meeting showed a widespread support for continue lifting rates but noted that it will become appropriate at some point to slow the pace of rate increases.
- On the data front, producer price (PPI) inflation in the US eased in September (8.5% y/y after 8.7%), albeit less than expected. By contrast, industrial production in the eurozone surprised to the upside, rising by 1.5% m/m in August.
- In this context, stocks fell further while sovereign bond yields rose in both sides of the Atlantic. The USD appreciated modestly while oil prices ticked down.