Financial Markets Daily Report
15 March 2023

Risk appetite returned to the fore on Tuesday, as investors reassessed the outlook for monetary policy across major central banks in the aftermath of the turmoil generated by the collapse of two regional banks in the US.

FMDR
  • Risk appetite returned to the fore on Tuesday, as investors reassessed the outlook for monetary policy across major central banks in the aftermath of the turmoil generated by the collapse of two regional banks in the US.
  • Data on Tuesday also showed CPI inflation in the US eased in line with expectations (6.0% y/y in February after 6.4%), although remaining very elevated and with no signs that underlying inflationary pressures are receding.
  • Money markets showed an upward revision in investors expectations for policy interest rates, with investors repricing a 25 bp hike by the Federal Reserve next week. In this context, sovereign bond yields rose while equity prices recovered some of the recent losses. Oil prices fell further, dropping below 80 USD for a barrel of Brent.
  • This morning data published in China showed retail sales rose by 3.5% y/y in January-February while industrial production went up by 2.4%, in line with expectations.
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