Financial Markets Daily Report 08 November 2022
Investors started the week trading with a cautious approach. On the positive side, sentiment continued to be supported by expectations that the Chinese government could relax some of its COVID zero policy. On the opposite direction, data showed further weakness in China’s economic recovery.
- Investors started the week trading with a cautious approach. On the positive side, sentiment continued to be supported by expectations that the Chinese government could relax some of its COVID zero policy. On the opposite direction, data showed further weakness in China’s economic recovery.
- In particular, exports in China contracted by 0.3% y/y in October, the first annual decline since May 2020 and well below consensus expectations. Imports also fell, down by 0.7% y/y. In the eurozone, Bank of France Governor Villeroy said the ECB should keep raising interest rates, even at a reduced pace, until core inflation starts to ease.
- In this context, stocks rose in both the US and the eurozone, following another rebound in equity prices across Asia. In FX markets, the euro appreciated, trading around parity against the USD. Sovereign bond yields also moved higher.
- Today, the focus turns to the US midterm elections. Retail sales for September are also released for the eurozone.