Financial Markets Daily Report 16 June 2022
In yesterday's session, central banks gave some fresh air to financial markets, fueling a relief rally across the board, with yields on sovereign bonds declining sharply in both sides of the Atlantic.
- In yesterday's session, central banks gave some fresh air to financial markets, fueling a relief rally across the board, with yields on sovereign bonds declining sharply in both sides of the Atlantic.
- On the one hand, the ECB Governing Council gathered in an emergency meeting after the selloff in peripheral public bonds since last Thursday. At its conclusion, the ECB decided to start using PEPP's reinvesting capacity (€1.7tn) flexibly across countries and to accelerate the design of a new anti-fragmentation tool.
- On the other hand, the Fed hiked interest rates by 75bp, for the first time since 1994, in their attempt to restore price stability. Fed Chair Powell noted that hikes of this size will be "not common" but might happen again if necessary.
- Stock indices rose across the board, the US dollar weakened against most currencies and the euro fluctuated above $1.04. In commodity markets, European gas prices surged markedly as Russia signaled further supply cuts.