Financial Markets Daily Report

Financial Markets Daily Report
13 October 2023

Investors’ perception that  central banks will still need to increase interest rates in this hiking cycle was the main driver in yesterday’s session. The release of the last ECB meeting minutes and the somewhat higher-than-expected September CPI inflation data for the US fueled this expectation.

FMDR
  • Investors’ perception that  central banks will still need to increase interest rates in this hiking cycle was the main driver in yesterday’s session. The release of the last ECB meeting minutes and the somewhat higher-than-expected September CPI inflation data for the US fueled this expectation.
  • In particular, headline inflation stood at 3.7% (3.6% expected by the consensus) and core inflation edged down, as expected, from 4.3% to 4.1%. Shelter inflation, the bigest item in the consumtion basket, was the main concern for investors, as it increased from 0.3% m/m to 0.6%.
  • In this context, yields on sovereign bonds rose markedly on both sides of the Atlantic while stock indices posted losses across advanced economies. In FX markets, the US dollar strengthened against most peers and the euro fluctuated below $1.06. Today the focus will be on the October University of Michigan sentiment indicators for the US.
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