Financial Markets Daily Report14 December 2023
Yesterday’s FOMC meeting boosted investor sentiment as the Fed sent a strong signal that the hiking cycle is over and that its members expect at least two rate cuts in 2024 (according to the median of the Dot-plot projections). This caused government bond yields to fall across the board, especially US Treasuries.
- Yesterday’s FOMC meeting boosted investor sentiment as the Fed sent a strong signal that the hiking cycle is over and that its members expect at least two rate cuts in 2024 (according to the median of the Dot-plot projections). This caused government bond yields to fall across the board, especially US Treasuries.
- The US equity market also benefited from the risk-on sentiment and its major indexes posted gains, as did other markets in the US time zone, such as the Latin American indexes. The major European equity indices had closed slightly lower earlier, partly dragged down by a larger than expected fall in Eurozone industrial production for October.
- In the currency markets, falling Treasury yields took their toll on the dollar, which depreciated against its major peers, most notably the yen. Today’s focus will be on the ECB and BoE meetings, as investors assess whether other large central banks will follow the Fed’s lead.