Financial Markets Daily Report09 February 2023
Central bank communication remained at the center stage yesterday, as Fed and ECB officials reiterated that monetary policy would need to be restrictive for a while. In the eurozone, GC member Klaas Knot, said the ECB should only decrease the pace of rate hikes once it sees underlying inflation abating, pointing to a 50bp hike in May.
- Central bank communication remained at the center stage yesterday, as Fed and ECB officials reiterated that monetary policy would need to be restrictive for a while. In the eurozone, GC member Klaas Knot, said the ECB should only decrease the pace of rate hikes once it sees underlying inflation abating, pointing to a 50bp hike in May.
- From the Fed, John Williams said that bringing rates to the 5.00%-5.25% target range seems reasonable. By contrast, Lisa Cook said that it is appropriate to move in smaller steps while assessing the effects of the cumulative tightening.
- In this context, yields on sovereign bonds ticked up in the euro area and decreased in the US. Equities declined in the other side of the Atlantic, with the tech sector leading the losses, and were mixed in Europe.
- Earlier this morning, data showed that January’s HICP inflation for Germany decreased by more than expected (from 9.6% to 9.2%, while consensus expected it to increase to 10.0%).