Financial Markets Daily Report16 September 2022
Risk aversion continued to set the tone on Thursday, with sentiment hampered by fears that elevated inflation could keep central banks in a tightening cycle for longer and the increasing threat of energy rationing in Europe this winter.
- Risk aversion continued to set the tone on Thursday, with sentiment hampered by fears that elevated inflation could keep central banks in a tightening cycle for longer and the increasing threat of energy rationing in Europe this winter.
- On the data front, macro indicators in the US painted a mixed picture of the economy, showing a modest monthly gain for retails sales in August and another drop in new jobless claims last week.
- In the eurozone, ECB VP Luis de Guindos urged “determined action” to keep inflation expectations anchored, calling for further interest rate hikes in upcoming meetings. Portugal’s central bank governor Mario Centeno, on the other hand, said the ECB should take “as small steps as possible” in raising rates.
- Stocks fell across the board, in Europe with retailers and energy companies leading the decline as banks gained. Sovereign bond yields continued to march higher while oil prices ticked down.