Financial Markets Daily Report
16 September 2020

Economic indicators favored a greater risk appetite in yesterday's session. China's industrial output rose +5.6% yoy in August while retail sales grew +0.5% and surpassed 2019 levels for the first time since the COVID-19 outbreak. Also, German investor sentiment continued to improve in September according to the ZEW index. 

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  • Economic indicators favored a greater risk appetite in yesterday's session. China's industrial output rose +5.6% yoy in August while retail sales grew +0.5% and surpassed 2019 levels for the first time since the COVID-19 outbreak. Also, German investor sentiment continued to improve in September according to the ZEW index. 
  • Volatility declined and stocks rose across the board. In fixed-income markets, core sovereign yields were little changed while euro area peripheral spreads continued to narrow. In EM markets, there was a muted reaction to Moody's downgrade of Turkey's sovereign rating to B2 (the agency warned of a balance-of-payments crisis).
  • On the political front, the WTO ruled that the U.S. had breached trading rules when imposing tariffs on China in 2018. Today investors will focus on the outcome of the Fed's monetary policy meeting, in which we expect the Fed to start laying the groundwork for adjustments to its forward guidance on interest rates and asset purchases.
     
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