Financial Markets Daily Report

Financial Markets Daily Report
13 March 2024

Yesterday’s session was driven by the US February CPI report, which showed inflation last month was 3.2% yoy, slightly higher than January’s reading at 3.1%. Despite the slight acceleration, markets still expect the Fed to begin cutting rates this year, betting on a total of 4 cuts, with the first one being on June (with 77% probability).

FMDR
  • Yesterday’s session was driven by the US February CPI report, which showed inflation last month was 3.2% yoy, slightly higher than January’s reading at 3.1%. Despite the slight acceleration, markets still expect the Fed to begin cutting rates this year, betting on a total of 4 cuts, with the first one being on June (with 77% probability).
  • US treasury yields advanced 5bp along the whole curve while euro area sovereign bond yields posted smaller gains. Equities, on the other hand, climbed to new record highs in the US and the VIX volatility index fell below 15. Euro area indices also rose ahead of the inflation data release.
  • Elsewhere, the US dollar was mostly flat with the euro holding steady around $1.09. In commodities, oil prices remained stable, and the European natural gas reference continued to trade below €25/MWh.
  • Today, markets will be expecting the release of the ECB’s new operational framework.
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FMDR