Financial Markets Daily Report 27 July 2023
The US Federal Reserve meeting centered the stage in yesterday's session with a 25bp interest rate hike, as expected by the consensus. The description of the economic outlook was very similar to June's, while the president Jerome Powell recognized that the last CPI inflation release surprised them slightly on the positive side.
- The US Federal Reserve meeting centered the stage in yesterday's session with a 25bp interest rate hike, as expected by the consensus. The description of the economic outlook was very similar to June's, while the president Jerome Powell recognized that the last CPI inflation release surprised them slightly on the positive side.
- Powell made clear that the decision at the September meeting will be data dependent and that both a rate hike or a pause could happen. In this context, yields on US Treasury bonds edged modestly down, as the implied pace of Fed's official interest rates was revised modestly downwards. In the euro area, sovereign yields rose.
- In stock markets, equity indices declined in core euro area countries while rising in the periphery and US indices were barely flat, despite the somewhat better-than-expected corporate profits releases.
- Today the focus will be on the US Q3 GDP release (1.8% SAAR exp.) and the ECB meeting (+25bp rate hike exp.).