Financial Markets Daily Report 14 February 2023
Investors started the week with no clear direction, with all eyes focusing on the release of the January CPI inflation print in the US today, where the consensus (according to Bloomberg) expects headline inflation to ease to 6.2% y/y (from 6.5% in December). The second release of Q4 GDP in the eurozone is also published today.
- Investors started the week with no clear direction, with all eyes focusing on the release of the January CPI inflation print in the US today, where the consensus (according to Bloomberg) expects headline inflation to ease to 6.2% y/y (from 6.5% in December). The second release of Q4 GDP in the eurozone is also published today.
- Echoing recent messages from other FOMC members, Michelle Bowman said that it will be necessary to tighten monetary policy further to control inflation, adding that rates would need to stay at a restrictive level for some time.
- In Europe, the European Commission revised up its eurozone GDP growth projections for 2023 (+0.6pp to 0.9%) while leaving unchanged 2024 (1.5%). Inflation is expected to be lower in 2023 (-0.5pp to 5.6%) and 2024 (-0.1pp to 2.5%).
- In this context, stocks rose in both sides of the Atlantic while sovereign bond yields hovered around recent levels. The EUR strengthened modestly against the USD, oil prices were little changed and natural gas prices fell further.