Financial Markets Daily Report 20 December 2021
In the last session of the week, investors continued to digest the decisions taken by the main central banks in advanced economies. Although at different speeds, and with the exception of the Bank of Japan, all central banks shifted towards a tighter monetary policy despite rising COVID-19 cases.
- In the last session of the week, investors continued to digest the decisions taken by the main central banks in advanced economies. Although at different speeds, and with the exception of the Bank of Japan, all central banks shifted towards a tighter monetary policy despite rising COVID-19 cases.
- In this context, volatility rose and stock indices declined across the board. In fixed-income markets, yields on 10-year sovereign bonds declined in the euro area and peripheral spreads narrowed, particularly so in Italy. In the US, the Treasury yield curve flattened, with short term bonds yields rising.
- In FX markets, the US dollar strengthened against most advanced and emerging economies' currencies and the euro fluctuated above $1.12. The Turkish lira extended its plunge after the central bank decided to cut interest by 100 basis points despite inflation running high above its target.