Financial Markets Daily Report16 December 2021
Financial markets recorded a risk-on session, after the US Federal Reserve delivered a more hawkish strategy against the risk of elevated inflationary pressures.
- Financial markets recorded a risk-on session, after the US Federal Reserve delivered a more hawkish strategy against the risk of elevated inflationary pressures.
- In particular, the official projections by the central bank included three policy rate hikes in 2022 and 2023, while net asset purchases are expected to be concluded by March 2022, in both cases earlier than previously announced. Fed Chair Powell noted that inflation has been more persistent, but that the economic recovery remains strong.
- In this context, equity prices rebounded in the US and in most European markets, the US Treasury yields rose, and the yield curve flattened, while the euro hovered around recent levels. Commodity prices also picked up modestly.
- Central banks will remain the key focus today for markets, with policy decisions by the ECB, the Bank of England and other central banks. The flash PMI December surveys will also be released across advanced economies.