Financial Markets Daily Report11 February 2022
In yesterday’s session investors consolidated their bets on a tighter monetary policy in the US following January’s CPI data. Headline and core inflation rose by 0.5pp to 7.5% and 6.0%, respectively, while consensus was expecting an increase of 0.3 and 0.4pp.
- In yesterday’s session investors consolidated their bets on a tighter monetary policy in the US following January’s CPI data. Headline and core inflation rose by 0.5pp to 7.5% and 6.0%, respectively, while consensus was expecting an increase of 0.3 and 0.4pp (more details here).
- In this context, sovereign yields rose across the board. In the US, the yield on the 2-year Treasury yield rose by 22bp to 1.58%, a level not seen since early 2020, while the 10-year yield increase by 9bp and crossed the 2% threshold. Ten-year yields in core euro area countries rose by a similar amount while peripheral spreads widened.
- In stock markets, volatility increased and equities were mixed across advanced and emerging economies.
- Yesterday, the European Commission released its winter forecasts, which showed for the euro area a 0.3pp decrease in 2022 GDP growth to 4.0% (+0.1pp to 5.6% for Spain) and a 1.3pp increase in HICP inflation (to 3.5%).