Financial Markets Daily Report18 February 2022
Financial markets recorded yesterday another session dominated by risk-off sentiment, fueled by uncertainty around geopolitical tensions involving Ukraine, hawkish comments by central bank officials and disappointing labour market data in the US (new jobless claims rose to 248.000 for the week ending Feb 12).
- Financial markets recorded yesterday another session dominated by risk-off sentiment, fueled by uncertainty around geopolitical tensions involving Ukraine, hawkish comments by central bank officials and disappointing labour market data in the US (new jobless claims rose to 248.000 for the week ending Feb 12).
- The ECB’s chief economist Philip Lane said on Thursday that inflation is unlikely to drop below 2% in the next two years, justifying a policy change by the central bank. Bank of Spain Pablo Hernandez de Cos urged that policy stimulus should be withdrawn gradually. In the US, James Bullard (Fed St. Louis) reiterated a call for a 1 pp hike by end-June.
- In this context, stocks fell in both sides of the Atlantic and sovereign bond yields declined notably, driven by save haven demand on concerns about a possible Russian invasion on Ukraine. The USD also appreciated.
- Today, Chicago Fed President Evans and Fed Governor Waller are scheduled to give speeches.