Financial Markets Daily Report03 March 2022
After Tuesday's risk-off session, which caused sharp declines in sovereign yields and losses in stock markets, investors traded yesterday with more optimism amid Jerome Powell positive comments about the strength of the US economy.
- After Tuesday's risk-off session, which caused sharp declines in sovereign yields and losses in stock markets, investors traded yesterday with more optimism amid Jerome Powell positive comments about the strength of the US economy.
- In particular, he noted that although the Russian-Ukrainian war was a game changer, the US economy is expanding with enough force to resist several rate hikes this year. He favoured a 0.25pp raise in the coming meeting.
- In the euro area, inflation in February rose by 0.7pp to 5.8%, with all components increasing their figures compared to January's. ECB members expressed mixed comments about it: some argued that high inflation is transitory and highlighted the uncertainty caused by the war while Joachim Nagel said the ECB must act if price stability requires it.
- In this context, stock indices rose across the board and sovereign yields surged in both sides of the Atlantic. In commodity markets, the barrel of Brent rose above $110 per barrel and European gas prices above €165/MWh.