Financial Markets Daily Report04 October 2023
Risk-off sentiment took over the market yesterday after the US JOLTS report showed an unexpected rise in job openings in August, which could support further rate hikes by the Fed, although comments from Fed officials on the day were mixed, with Mester leaning towards a hike at the upcoming meeting and Bostic opting to hold.
- Risk-off sentiment took over the market yesterday after the US JOLTS report showed an unexpected rise in job openings in August, which could support further rate hikes by the Fed, although comments from Fed officials on the day were mixed, with Mester leaning towards a hike at the upcoming meeting and Bostic opting to hold.
- In this context, government bond yields rose across the board on both sides of the Atlantic, especially long-term bonds, leading to steeper yield curves. In the eurozone, peripheral spreads also widened, signalling a flight to quality. Declines in major equity indices were also widespread.
- In the currency markets, the USD strengthened against its major peers. The dollar even broke through the 150 JPY level against the yen, which was seen by many investors as an important threshold, although it ended the day slightly below that level. Elsewhere, the European LNG benchmark TTF fell after Egypt announced plans to resume exports this month.