Financial Markets Daily Report
04 May 2022

Investors traded under a cautiously optimistic mood on Tuesday, waiting for the outcome of the Federal Reserve meeting to be announced today. Consensus expectations look for a 50 bp hike in the policy rate as well as details of the plan to reduce the central bank’s balance sheet.

FMDR
  • Investors traded under a cautiously optimistic mood on Tuesday, waiting for the outcome of the Federal Reserve meeting to be announced today. Consensus expectations look for a 50 bp hike in the policy rate as well as details of the plan to reduce the central bank’s balance sheet.
  • On the data front, US job openings increased to a record high in March, signaling worker shortages persist. In the eurozone, PPI jumped by 36.8% y/y in March, above expectations.
  • In this context, sovereign bond yields continued to rise across Europe, with the 10-year German bund nearing the 1% level while spreads across the periphery widened. In the US, the sovereign yield curve flattened while the USD fluctuated around recent levels. Stock indices ended the day higher in both sides of the Atlantic.
  • Today, the final service PMIs will be released. The EU Commission is also due to unveil new sanctions against Russia.
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