Financial Markets Daily Report 17 June 2022
Monetary policy and recession fears centered, again, the stage in financial markets. While investors focused on risks of an upcoming recession in the US, central banks continued tightening their monetary policy stance.
- Monetary policy and recession fears centered, again, the stage in financial markets. While investors focused on risks of an upcoming recession in the US, central banks continued tightening their monetary policy stance.
- In a surprise move, the Swiss National Bank hiked rates by 50bp to -0.25% and the Bank of England hiked by another 25bp to 1.25%, signaling larger moves if needed. Early this morning, though, the Bank of Japan kept its official interest rate unchanged at -0.10% and maintained its yield curve control tool.
- In this context, stock indices declined across the board, with the US tech-heavy Nasdaq losing more than 4%. In fixed-income markets, yields on euro area core sovereign bonds increased while peripheral spreads narrowed. In the US, yields on the US Treasury declined and the 10-year reference yielded 3.2%.
- In commodity markets, gas prices continued to rebound in Europe due to restrictions in Russian supply.