Financial Markets Daily Report

Financial Markets Daily Report
13 March 2023

Volatility and risk aversion continued to set the tone across financial markets in the last session of the week. On the one hand, investors sentiment continued to be impaired by liquidity concerns in the banking sector, sparked by the crisis and subsequent closure by regulators of a small tech-focused financial group in the US (SVB).

FMDR
  • Volatility and risk aversion continued to set the tone across financial markets in the last session of the week. On the one hand, investors sentiment continued to be impaired by liquidity concerns in the banking sector, sparked by the crisis and subsequent closure by regulators of a small tech-focused financial group in the US (SVB).
  • On the other hand, labour market data in the US showed a slowdown in the pace of job creation in February (311.000) while the jobless rate ticked up (+0.2 pp to 3.6%). Wage growth also slowed down modestly (0.2% m/m).
  • In this context, equity prices fell notably across the board, led by the banking sector. Sovereign bond yields dropped while the USD depreciated against peers, as investors scaled down their expectations for the policy rate ahead. 
  • The focus this week will turn to the ECB monetary policy meeting on Thursday. In addition, CPI inflation for February is released in the US on Tuesday while monthly activity indicators are published in China on Wednesday.
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FMDR