Financial Markets Daily Report21 February 2024
In yesterday’s session investors traded cautiously as they await PMIs for advanced economies to be released on Thursday, the Fed’s and ECB’s minutes (out today and tomorrow, respectively) and key corporate earnings in the US.
- In yesterday’s session investors traded cautiously as they await PMIs for advanced economies to be released on Thursday, the Fed’s and ECB’s minutes (out today and tomorrow, respectively) and key corporate earnings in the US.
- On the macro front, ECB data showed 4Q euro area wage growth slowed to 4.5% yoy from 4.7% in the previous quarter. The announcement had little impact on market expectations of future ECB interest rate cuts, which continue to price the first cut in the June meeting, assigning only a 45% probability of a cut in the April meeting.
- In this context, sovereign bond yields fell modestly on both sides of the Atlantic, while equities were mixed. Elsewhere, the PBoC, China’s central bank, reduced the five-year loan rate by 25bp (from 4.2% to 3.95%) in a new effort from the government to support the hurting property sector. Chinese equities rallied on the news.
- In commodity markets Brent oil prices slid amid concerns of a slowdown in global demand but are still above $82/barrel.