Financial Markets Daily Report21 March 2024
The future path of central bank official interest rates continued to be the main driver in financial markets, as investors reacted to the US Federal reserve meeting and to several ECB members’ speeches.
- The future path of central bank official interest rates continued to be the main driver in financial markets, as investors reacted to the US Federal reserve meeting and to several ECB members’ speeches.
- The Fed kept rates unchanged at the 5.25%-5.50% target range and Powell explained that, despite the disinflationary process progresses, recent data is not increasing Fed’s confidence that inflation is heading to 2% sustainably. The dot plot, though, continues to signal 3 cuts in 2024 and the probability of seeing the first cut by June rose to 81%.
- In the euro area, Christine Lagarde said that there is still some disinflation to be seen in domestic prices and highlighted wages as a key indicator to monitor before cutting interest rates.
- In this context, yields on sovereign bonds declined, particularly so in the US, and equities rose across the board.
- Today the focus will be on the flash PMIs of March in the main advanced economies and on the BoE meeting.