Evolution of the international financial markets and evaluation of the main events and economic indicators of the previous day session. Available in English.
Central banks continued to center the stage on Thursday. On the one hand, investors continued to digest the Fed meeting, where Chairman Powell signaled a “slower for higher” approach in interest rates hikes, and, on the other, the Bank of England’s decision to increase rates by 75bp, albeit diminishing market expectations for the path ahead.
In yesterday's session, investors focused their attention on the Federal Reserve meeting, where interest rates were raised by 75bp to the 3.75%-4.00% target range. Crucially, president Jerome Powell explained that the pace of the upcoming hikes could moderate but that the terminal rate might be higher than previously anticipated.
In yesterday's session, investors traded cautiously amid better-than-expected labor market data in the US. In particular, September job openings and the employment component of the ISM surprised the consensus, increasing the bar for a Fed pivot in the meetings beyond today's (where we expect a 75bp rate hike).
In the last session of the week, inflation and GDP releases centered the stage in European trading floors. HICP inflation for October surprised on the upside in most euro area countries as well as Q3 GDP figures for Germany (+0.2 q/q instead of the expected contraction). Today aggregated figures for the euro area will be released.
Financial markets closed with mixed results during a highly volatile session on Thursday, as investors digested policy announcements by the ECB and upside surprises in economic data in the US (GDP rose by 2.6% SAAR in Q3).
Investors continued to trade with a risk-on mood, fueled by expectations that the Fed and the ECB could decide to reduce the pace of monetary tightening from December, which for the US were reinforced by the release of weak housing data. Investors were also taking position ahead of a crucial monetary policy decision by the ECB today.
Risk appetite extended gains across markets on Tuesday, as investors took on board positive signals from corporate earnings, a further softening in US sentiment and housing indicators and a decline in gas prices across the globe.
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.
Investors closed the week trading cautiously under a volatile setting, still digesting political developments in the UK and signs of lingering inflationary pressures. In Europe, natural gas prices fell notably, following reports that Germany is likely to support a price cap to be included in the next EU package, to be agreed in coming weeks.
In yesterday’s session, politics centered the stage in financial markets, following the resignation of UK Prime Minister Liz Truss due to the loss of confidence in her government. The Conservative Party is expected to present a new leader before the end of October and ahead of the release of the widely expected fiscal plan.
In yesterday's session, investors traded with a cautious mood, despite the good news in the earnings season, as they continued to assess a complicated macroeconomic scenario.
In yesterday's session, investors continued to trade with an upbeat tone amid better-than-expected corporate profits releases and macroeconomic data. In particular, the US industrial production in September rose by 0.4% m/m and the Zew survey expectations index for Germany and the euro area edged up modestly in October.