Financial Markets Daily Report13 December 2023
US November CPI report came mostly in line with expectations: prices grew 0.1% MoM (vs. 0.0% expected) and 3.1% YoY (as expected) down from 3.2% in October, reinforcing the view the Fed will leave rates unchanged at its meeting today. The lack of surprises left markets rather muted, with treasury yields flat and stock indices slightly advancing.
- US November CPI report came mostly in line with expectations: prices grew 0.1% MoM (vs. 0.0% expected) and 3.1% YoY (as expected) down from 3.2% in October, reinforcing the view the Fed will leave rates unchanged at its meeting today. The lack of surprises left markets rather muted, with treasury yields flat and stock indices slightly advancing.
- Euro area sovereign bond yields fell following stronger expectations for German growth (German ZEW growth expectations index rose to 12.8 from 9.8 last), but stock markets were mostly flat. The dollar was little changed, and the barrel of Brent fell below $75 amid concers that supply is running ahead of demand due to higher US output.
- Today, markets will focus on the FOMC's rate decision (which is expected to leave rates unchanged) and especially on Powell's speech for clues about the path ahead for monetary policy. Markets currently discount a first interest rate cut in March with a 45% probability, down from 70% one week ago, and a total cut of 110 b.p. in 2024.