Financial Markets Daily Report01 March 2023
Investors continued to trade with caution on Tuesday, taking on board the upside surprise in February HICP inflation in both France (7.2% y/y) and Spain (6.1%) and dialing up its expectations for policy interest rates hikes (money markets price the depo rate could near 4% by year end). Today, the German HICP data is released.
- Investors continued to trade with caution on Tuesday, taking on board the upside surprise in February HICP inflation in both France (7.2% y/y) and Spain (6.1%) and dialing up its expectations for policy interest rates hikes (money markets price the depo rate could near 4% by year end). Today, the German HICP data is released.
- The upward revisions in investors expectations triggered yet another rebound in sovereign bond yields across the eurozone, with the German 10-year bund reaching 2.65% (highest since 2011). In the US, bond yields also ticked higher, more notably at short end maturities, which resulted in a further inversion of the yield curve.
- In this context, stock indices closed with mixed results while the USD recovered some gains against other currencies, trading around 1.06 against the EUR. Oil prices rose modestly on the back of signs of increased demand from China.
- This morning, data showed the composite PMI in China improved from 52.9 in January to 56.4 in February.