Financial Markets Daily Report16 January 2023
Risk appetite continued to set the tone in the last session of the week, as investors reassessed prospects for less aggressive monetary policy tightening, on the back of reduced inflationary pressures, and took on board mixed results at the start of the Q4 earnings season among large US banks.
- Risk appetite continued to set the tone in the last session of the week, as investors reassessed prospects for less aggressive monetary policy tightening, on the back of reduced inflationary pressures, and took on board mixed results at the start of the Q4 earnings season among large US banks.
- In the eurozone, the ECB said banks will repay an additional €63bn in TLTROs this month, bringing the total reduction of outstanding loans to around €860bn since November.
- In this context, equity prices rose while sovereign bond yields were broadly unchanged across Europe but edged up in the US, where US Treasury Secretary Janet Yellen said that the country will likely hit the debt limit on January 19.
- This week, the focus will turn to the Bank of Japan’s meeting (Tue.) and the release of the minutes of the last meeting of the ECB (Thu.). China will also publish Q4 GDP (Tue.). Today markets are closed in the US due to a public holiday.