Financial Markets Daily Report11 January 2023
In yesterday’s session, higher-than-expected inflation data for December in Japan (headline 4.0%; core 2.7%) and hawkish comments from some central bank officials were the main drivers in financial markets. In particular, ECB Isabel Schnabel reiterated that interest rates need to be risen significantly to tackle down inflation.
- In yesterday’s session, higher-than-expected inflation data for December in Japan (headline 4.0%; core 2.7%) and hawkish comments from some central bank officials were the main drivers in financial markets. In particular, ECB Isabel Schnabel reiterated that interest rates need to be risen significantly to tackle down inflation.
- In the same conference, Jerome Powell avoided to comment on the state of the US economy and the monetary policy but said that to restore price stability central banks need to pursue unpopular policies. In addition, Fed Governor Michelle Bowman said that inflation is much too high and there is still “a lot more work to do”.
- In this context, yields on sovereign bonds rose in both sides of the Atlantic while equities were mixed. In FX markets, the USD strengthened against most advanced economies’ currencies except for the euro, which fluctuated above $1.07.
- On its Global Economic prospect, the World Bank slashed its GDP growth projection for 2023 from 3.0% to 1.7%.