Financial Markets Daily Report18 December 2023
In the last session of the week, investors focused their attention on the ECB and Fed officials’ speeches, which tried to push back against the expectation for early interest rate cuts.
- In the last session of the week, investors focused their attention on the ECB and Fed officials’ speeches, which tried to push back against the expectation for early interest rate cuts.
- In particular, NY Fed President John C. Williams said that talking about the first rate cut is premature, since there is no clear evidence yet that there will not be additional hikes. In Europe, Austrian Central bank Governor Robert Holzmann said that the probability of an additional rate hike has decreased, but it is not zero.
- On the macroeconomic side, November PMIs showed that economic activity remains weak in Q4. In the euro area, the Composite PMI fell from 47.6 points to 47.0 and in the US edged up from 50.7 to 51.0.
- In this context, yields on sovereign bonds declined in the euro area, with peripheral spreads widening, while the short end of the US Treasury curve rose. In stock markets, equities were mixed.