Financial Markets Daily Report02 March 2022
Yesterday, financial markets suffered another risk-off session amid rising concerns among investors about the impact the Russian-Ukrainian war may have on the global economy. According to inflation swaps, financial markets expect prices to increase in the short run, while the expected ECB and Fed policy tightening lost some steam.
- Yesterday, financial markets suffered another risk-off session amid rising concerns among investors about the impact the Russian-Ukrainian war may have on the global economy. According to inflation swaps, financial markets expect prices to increase in the short run, while the expected ECB and Fed policy tightening lost some steam.
- In this context, stock indices declined across the board and volatility measured with the VIX index rose. Yields on sovereign bonds decreased, particularly so in Germany, where the yield on the Bund sank by 21bp and returned to the negative territory. Euro area peripheral spreads narrowed.
- The conflict in Ukraine shadowed the positive release of February Manufacturing PMIs, which rose in Spain (from 56.2 to 56.9) and remained at elevated levels in the main advanced economies. Today's focus will be on euro area HICP and on Jerome Powell testimony in Congress.