Financial Markets Daily Report 05 enero 2023
Investors started the year trading with a risk-on mode, taking on board data showing receding inflationary pressures in Europe, a slowdown in economic growth in the US and a further decline in energy prices across the globe. As a result, investors revised down modestly their expectations for future policy interest rate hikes.
- Investors started the year trading with a risk-on mode, taking on board data showing receding inflationary pressures in Europe, a slowdown in economic growth in the US and a further decline in energy prices across the globe. As a result, investors revised down modestly their expectations for future policy interest rate hikes.
- In particular, HICP inflation for December eased more than expected in Spain (-1.1pp to 5.6% y/y), Germany (-1.7pp to 9.6%) and France (-0.4pp to 6.7%) while in the US the ISM manufacturing remained in contractionary territory.
- In addition, the minutes of the December Fed meeting showed officials wanted to see more evidence of cooling inflation but still supported raising interest policy rates at a slower pace.
- In this context, stocks rose strongly while sovereign bond yields edged down, more notably across the eurozone periphery. Gas and oil prices fell markedly fueled by warm winter weather and concerns about the global economy.