Financial Markets Daily Report 31 January 2023
Investors kicked off a busy week of macro data releases and central bank decisions with a cautious approach, taking on board signs of lingering inflationary pressures across Europe as well as disappointing GDP figures in Germany (-0.2% q/q after +0.5% in Q3, ahead of the release of the eurozone aggregate this morning).
- Investors kicked off a busy week of macro data releases and central bank decisions with a cautious approach, taking on board signs of lingering inflationary pressures across Europe as well as disappointing GDP figures in Germany (-0.2% q/q after +0.5% in Q3, ahead of the release of the eurozone aggregate this morning).
- In particular, HICP inflation in Spain surprised to the upside in January (5.8% y/y from 5.5% in December), fueling expectations for a hawkish rhetoric at the ECB meeting this week. The German HICP print will be released later today while the eurozone aggregate is published tomorrow.
- In this context, sovereign bond yields picked up, more notably across the eurozone periphery, while the USD appreciated modestly against its peers. Stocks fell across the board, even in China, where markets reopened after the Lunar New Year festivities. Elsewhere, oil prices and natural gas prices edged down.