Financial Markets Daily Report 17 January 2022

Investors traded cautiously in the last session of the week, still digesting the more hawkish shift by the major central banks and with a weaker-than-expected start of the Q4 earning seasons for US banks. Monthly data also showed a decline in retail sales (-1.9% m/m) and industrial production (-0.1% m/m) in the US in December.

FMDR
  • Investors traded cautiously in the last session of the week, still digesting the more hawkish shift by the major central banks and with a weaker-than-expected start of the Q4 earning seasons for US banks. Monthly data also showed a decline in retail sales (-1.9% m/m) and industrial production (-0.1% m/m) in the US in December.
  • In this context, stock indices declined across Europe and were mixed in the US. Sovereign yields rose notably (+ 8 pb for the US 10-year bond) while the EUR depreciated (near 1.14 versus the USD).
  • In Asia, stocks were mixed on Monday, after the release this morning of the Chinese real GDP: up by 4% y/y in Q4, the slowest pace since Q2 2020. The PBOC also announced a 10 bp cut in the 1-year policy rate.
  • Markets are closed today in the US due to a bank holiday. The key events this week are the release of the ZEW survey in Germany for January (Tuesday) and the accounts of the December meeting by the ECB (Thursday).
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