Financial Markets Daily Report 12 May 2022
In yesterday's session, investors' expectations on inflation and the path central banks could follow in the coming months remained the key drivers. The moderation of US inflation in April (headline -0.2pp to 8.3% and core -0.3pp to 6.2%) suggests that the peak may have already been in March.
- In yesterday's session, investors' expectations on inflation and the path central banks could follow in the coming months remained the key drivers. The moderation of US inflation in April (headline -0.2pp to 8.3% and core -0.3pp to 6.2%) suggests that the peak may have already been in March.
- Nevertheless, the expectation of inflation remaining high during 2022 pushed investors to bet 50bp hikes by the Fed in the three upcoming meetings. In the euro area, ECB president Lagarde hinted that a first interest rate hike in July is possible.
- In this context, stock indices in the euro area continued to recover from the previous days' losses while shares in the US fell further. In fixed-income markets, yields on 10-year sovereign bonds decreased across the board.
- In commodity markets, the price of the barrel of Brent rose after Russian flows to Europe declined.