Financial Markets Daily Report20 December 2022
Investors continued to err on the side of caution at the start of the week, with the focus turning to the risk of a global recession amid expectations of further monetary policy tightening from major central banks and the ongoing deterioration in the COVID pandemic in China.
- Investors continued to err on the side of caution at the start of the week, with the focus turning to the risk of a global recession amid expectations of further monetary policy tightening from major central banks and the ongoing deterioration in the COVID pandemic in China.
- In commodity markets, oil prices rose modestly following a repurchasing plan announced by the US government to replenish its strategic petroleum reserve. By contrast, natural gas prices in Europe edged down as temperatures were expected to increase and after a deal at the EU to cap natural gas prices at 180€/MWh.
- Elsewhere, equity prices fell in the US but rose modestly in Europe, boosted by better-than-expected sentiment data in Germany. In addition, yields on sovereign bonds marched higher while the EUR appreciated modestly. Today, the Bank of Japan holds a policy meeting while the EU Commission releases its business survey for December.