Financial Markets Daily Report 19 July 2023
A session with mixed results on Tuesday, as investors balanced out somewhat dovish comments from some key ECB officials with softer-than-expected activity data in the US (retail sales rose by 0.2% m/m in June while industrial production fell by 0.5% m/m) and a new batch of positive earnings reports from some US banks.
- A session with mixed results on Tuesday, as investors balanced out somewhat dovish comments from some key ECB officials with softer-than-expected activity data in the US (retail sales rose by 0.2% m/m in June while industrial production fell by 0.5% m/m) and a new batch of positive earnings reports from some US banks.
- In particular, Dutch central bank governor, Klass Knot, said that while an interest rate hike next week is a “necessity” any additional move beyond July is at most “a possibility”. Bank of Italy governor, Ignazio Visco, also noted that price gains may come down more quickly than projected by the ECB.
- Sovereign bonds extended recent gains, more notably across Europe, as investors revised down modestly their expectations for policy interest rates. Equity indices also rose while the USD was little changed.
- Today, the focus turns to inflation, with the release of the June CPI data in the UK and in the eurozone (final release).