Financial Markets Daily Report21 October 2022
In yesterday’s session, politics centered the stage in financial markets, following the resignation of UK Prime Minister Liz Truss due to the loss of confidence in her government. The Conservative Party is expected to present a new leader before the end of October and ahead of the release of the widely expected fiscal plan.
- In yesterday’s session, politics centered the stage in financial markets, following the resignation of UK Prime Minister Liz Truss due to the loss of confidence in her government. The Conservative Party is expected to present a new leader before the end of October and ahead of the release of the widely expected fiscal plan.
- Financial markets received the news positively, with the British pound strengthening against most of its peers and recovering part of the losses registered in the previous weeks. Elsewhere, stock indices rose across the board and yields on sovereign bonds ticked up in the euro area and more sharply in the US.
- On monetary policy, some FOMC members noted the Fed is likely to stop rate hikes at some point during next year to assess the impact of the cumulated tightening on the economy. In particular, Chicago Fed President Evans said that there might be non-linearities in this impact, a warning on the central bank limits to tackle elevated inflation.