Financial Markets Daily Report25 octubre 2022
Financial markets started the week with a risk-on session, fueled by the resolution of the political crisis in the UK and hopes that the softening in sentiment data could allow central banks to slow the pace of monetary tightening.
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- Financial markets started the week with a risk-on session, fueled by the resolution of the political crisis in the UK and hopes that the softening in sentiment data could allow central banks to slow the pace of monetary tightening.
- On the data front, the flash composite PMIs showed a further deterioration into contractionary territory in both the eurozone (47.1 in October from 48.1 in September) and the US (47.3 from 49.5) at the start of Q4. The price subindices also showed some moderation in inflationary pressures, albeit remaining near record highs.
- Stocks rebounded while sovereign bond yields edged down, led by UK bonds, after the Conservative party elected Rishi Sunak as the new PM, which reinforced expectations that the government would stick to the fiscal strategy unveiled in recent days. In commodity markets, gas prices fell further in Europe, with the TTF below 100 EUR/MWh.
- Today, the focus will turn to the IFO survey for October in Germany. The ECB also releases its Q3 bank lending survey.