Financial Markets Daily Report14 febrero 2024
US January CPI report surprised markets by showing an increase in prices of 3.1% y/y vs 3.0% expected, down from 3.4% last month, with core inflation unchanged at 3.9%. The news shook markets, sending global government bond yields higher and equity markets sharply lower, while pushing back the expectation of the Fed’s first cut from May to June.
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- US January CPI report surprised markets by showing an increase in prices of 3.1% y/y vs 3.0% expected, down from 3.4% last month, with core inflation unchanged at 3.9%. The news shook markets, sending global government bond yields higher and equity markets sharply lower, while pushing back the expectation of the Fed’s first cut from May to June.
- In particular, Treasury yields rose by more than 10bp to levels not seen since November 2023, while euro area yields rose only modestly. US equity indices fell sharply, led by the interest-rate sensitive tech giants, and the risk-off mood spread to euro area equities. The VIX volatility index rose the most since October to 15.8 points.
- Elsewhere the US dollar strengthened against its main peers, leaving its cross with the euro around $1.07, while commodity markets were mostly flat.
- Today, euro area Q4 revised GDP figures will be released along with Q4 employment data.