Financial Markets Daily Report19 October 2023
In yesterday’s session, investors traded with mixed sentiment as they navigate through heightened tensions in the Middle East and a continued rhetoric of “higher for longer interest rates” supported by strong US economic data. President Biden arrived in Israel but has not been able to achieve major diplomatic breakthroughs to calm markets.
- In yesterday’s session, investors traded with mixed sentiment as they navigate through heightened tensions in the Middle East and a continued rhetoric of “higher for longer interest rates” supported by strong US economic data. President Biden arrived in Israel but has not been able to achieve major diplomatic breakthroughs to calm markets.
- In this context, US sovereign bond yields continued their upward path surpassing the previous’ day peak to reach new 16-year highs with the 10Y treasury now at 4.91%. Euro area sovereign yields also rose between 5 and 9 bps while periphery economies’ risk premia remained mostly flat. Stock indices fell sharply on both sides of the Atlantic.
- In commodities, Brent prices traded above $90 per barrel as a consequence of the Gaza conflict. The US dollar strengthened and left the euro around $1.054. Today, Fed Chair Powell is expected to give a speech that might give further clues to investors. The market is expecting the Fed to hike rates in December with a probability of 40%.