Financial Markets Daily Report08 January 2026
Euro area sovereign bond yields continued to fall during yesterday's session, as earlier data releases that showed a lower-than-expected inflation in France and Germany were complemented with an inflation in the euro area in December of a 2% annual variation. Expectations of an ECB rate hike fell as well, as now the market does not price one until 2028.
US Treasuries did not move significantly and the curve flattened slightly, as yesterday's releases showed signs of a cooling job market. In commodities markets, oil prices fell to $60/barrel (Brent) after US President Donald Trump announced the US will import up to $2bn worth of Venezuelan crude.
Global equity indices closed with mixed performance, with the Japanese Nikkei 225 registering the steepest losses after China announced new export controls to Japan amid rising tensions surrounding Taiwan. The Japanese yen depreciated moderately against the dollar, in a session with no major movements in the currency market.