Financial Markets Daily Report 11 November 2022
A risk-on session was recorded across markets on Thursday after the softer-than-expected inflation data in the US and the uptick in new weekly jobless claims reinforced hopes for a slowdown in the pace of rate hikes by the Fed.
- A risk-on session was recorded across markets on Thursday after the softer-than-expected inflation data in the US and the uptick in new weekly jobless claims reinforced hopes for a slowdown in the pace of rate hikes by the Fed.
- In particular, headline CPI rose by 0.4% m/m, well below consensus expectations (0.6%). In year-on-year terms, inflation eased by 0.5 pp to 7.7%, the lowest print since January. Core inflation also moved down (6.3% after 6.6%).
- Separately, Fed officials (Philadelphia, Dallas and San Francisco) reiterated the Fed could reduce the pace of rate hikes in upcoming meetings, welcoming the slowdown in inflation but noting that "one month does not a victory make".
- In this context, stocks rebounded and sovereign bond yields dropped notably in the US and in the eurozone, as investors adjusted down their expectations for the policy rates in coming months. The USD depreciated against its peers, trading above 1.02 versus the EUR, the highest level since August.