Financial Markets Daily Report
17 marzo 2022

In yesterday's session, investors' sentiment improved amid optimistic comments from Russian officials, which increased the odds of a diplomatic solution, and following the description of the outlook from Jerome Powell, who said the US economy is very strong and with an extremely tight labor market.

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FMDR
  • In yesterday's session, investors' sentiment improved amid optimistic comments from Russian officials, which increased the odds of a diplomatic solution, and following the description of the outlook from Jerome Powell, who said the US economy is very strong and with an extremely tight labor market.
  • As expected, the Federal Reserve hiked rates by 0.25pp and the dot plot showed a widespread preference across its members to do the same in each of the 6 remaining meetings this year. Also, most members expect rates to overshoot in 2023-24 the long run level (~2,00%-2,50%) in order to tackle inflation pressures.
  • In this context, stock indices rose across the board, in EMs also supported by a pledge by China to stabilize markets and boost the economy. In addition, yields on sovereign bonds rose, the euro strengthened, and energy prices fell.
  • Today the focus will be on the Bank of England meeting, which is expected to hike rates by 0.25pp too.
     
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