Financial Markets Daily Report01 June 2022
Inflation and monetary policy continued to center financial markets’ stage in yesterday’s session. Euro area HICP surprised again to the upside and reinforced the views of those in the ECB Governing Council pushing for a 50bp interest rate hike in July.
- Inflation and monetary policy continued to center financial markets’ stage in yesterday’s session. Euro area HICP surprised again to the upside and reinforced the views of those in the ECB Governing Council pushing for a 50bp interest rate hike in July.
- Headline inflation rose in May by 0.7pp to an all-time high of 8.1% and core inflation increased from 3.5% to 3.8%. In the US, Fed Governor Christopher Waller pushed back expectations of a pause after summer in the Fed interest rate hikes and urged for 50bp hikes at every meeting until inflation is decisively curved.
- In this context, yields on sovereign bonds surged in both sides of the Atlantic and stock indices declined. In FX markets, the US dollar strengthened against most currencies and the euro fluctuated above $1.07.
- Today the focus will be on May’s final manufacturing PMI figures.