Financial Markets Daily Report

Financial Markets Daily Report
04 noviembre 2022

Central banks continued to center the stage on Thursday. On the one hand, investors continued to digest the Fed meeting, where Chairman Powell signaled a “slower for higher” approach in interest rates hikes, and, on the other, the Bank of England’s decision to increase rates by 75bp, albeit diminishing market expectations for the path ahead.

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  • Central banks continued to center the stage on Thursday. On the one hand, investors continued to digest the Fed meeting, where Chairman Powell signaled a “slower for higher” approach in interest rates hikes, and, on the other, the Bank of England’s decision to increase rates by 75bp, albeit diminishing market expectations for the path ahead.
  • In the euro area, ECB president Christine Lagarde warned that a “mild recession” is possible but that it would not be sufficient to stem soaring prices. Separately, Fabio Panetta argued that policy rates should continue to increase but highlighted the risks of overtightening.
  • In this context, yields on sovereign bonds rose notably in both sides of the Atlantic and equities declined in most trading floors. In FX markets, the USD strengthened against most currencies and the euro fluctuated below $0.98.
  • Today the focus will be on the US employment report for October.
     
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