Financial Markets Daily Report06 February 2024
In the first session of the week, investors continued to reassess their expectations on the upcoming easing of the ECB and Fed’s monetary policy stance. The January PMI and ISM data releases showed a stronger-than-expected start of 2024 that decreased further the probabilities of seeing the first rate cut in April and May for both central banks.
- In the first session of the week, investors continued to reassess their expectations on the upcoming easing of the ECB and Fed’s monetary policy stance. The January PMI and ISM data releases showed a stronger-than-expected start of 2024 that decreased further the probabilities of seeing the first rate cut in April and May for both central banks.
- In particular, the US Services PMI rose from 50.4 to 53.4 and its prices paid component jumped from 56.7 to 64.0, a level not seen since last February that increases concerns on inflation’s last mile to 2%. In Spain and Italy, the Composite PMI rose to 51.5 and 50.7.
- In this context, yields on sovereign bonds rose on both sides of the Atlantic, with the increase being sharper in the US. Elsewhere, stock indices edged modestly down across the board and the US dollar strengthened against most of its peers, with the euro fluctuating below $1.08. Today the focus will be on December euro are retail sales.