Financial Markets Daily Report 23 September 2021

Yesterday's FOMC meeting was received without major surprises by financial markets. The Fed announced, as broadly expected, that the tapering on asset purchases would start soon if economic indicators come in as expected and that net asset purchases would finish by mid-2022.

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  • Yesterday's FOMC meeting was received without major surprises by financial markets. The Fed announced, as broadly expected, that the tapering on asset purchases would start soon if economic indicators come in as expected and that net asset purchases would finish by mid-2022.
  • The release of the dot plot showed that more participants expect the first interest rate hike to happen next year (9 out of 18) and the median voter expects up to 3 more rate hikes both in 2023 and in 2024. Separately, concerns around the health of the Chinese real estate sector abated further.
  • In this context, stock indices recovered, the U.S. Treasury curve flattened, and euro area sovereign bonds edged down. In commodity markets, the barrel of Brent rose as U.S. crude stocks registered their lowest level in three years.
  • Today the focus will be on the release of the flash September PMIs for the main advanced economies.
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