Financial Markets Daily Report02 November 2022
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 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 this context, yields on US short-term sovereign bonds rose and equities declined modestly while, in the euro area, stock indices increased and peripheral spreads narrowed. Elsewhere, speculation that China could ease some lockdown measures against COVID pushed Asian equities higher.
- In FX markets, the US dollar weakened against most currencies but not against the euro, which continued to fluctuate below the parity. The Brazilian real kept appreciating after the outcome of the Presidential elections and to the recent comments of Jair Bolsonaro expressing his willingness to smoothly transfer power to the new government.