Financial Markets Daily Report 18 July 2022
In the last session of the week, investors' sentiment improved as the odds for a 100bp hike in the next US Federal Reserve meeting decreased.
- In the last session of the week, investors' sentiment improved as the odds for a 100bp hike in the next US Federal Reserve meeting decreased.
- In this context, yields on sovereign bonds declined in both sides of the Atlantic and, in Italy, the risk premium increased as the political situation remains uncertain. Mario Draghi is expected to declare on Wednesday its intention either to resign as Prime Minister or to continue with a weak coalition government.
- Stock indices rose across the board amid mixed US earnings releases. In FX markets, the US dollar weakened against most currencies and the euro fluctuated below $1.01.
- This week the focus will be on the ECB meeting (Thu.), where we expect a 25bp interest rate hike and the details about the antifragmentation tool, and on July's flash PMIs for the main advanced economies (Fri.).