Financial Markets Daily Report 17 March 2022
In yesterday's session, investors' sentiment improved amid optimistic comments from Russian officials, which increased the odds of a diplomatic solution, and following the description of the outlook from Jerome Powell, who said the US economy is very strong and with an extremely tight labor market.
- In yesterday's session, investors' sentiment improved amid optimistic comments from Russian officials, which increased the odds of a diplomatic solution, and following the description of the outlook from Jerome Powell, who said the US economy is very strong and with an extremely tight labor market.
- As expected, the Federal Reserve hiked rates by 0.25pp and the dot plot showed a widespread preference across its members to do the same in each of the 6 remaining meetings this year. Also, most members expect rates to overshoot in 2023-24 the long run level (~2,00%-2,50%) in order to tackle inflation pressures.
- In this context, stock indices rose across the board, in EMs also supported by a pledge by China to stabilize markets and boost the economy. In addition, yields on sovereign bonds rose, the euro strengthened, and energy prices fell.
- Today the focus will be on the Bank of England meeting, which is expected to hike rates by 0.25pp too.