Financial Markets Daily Report20 June 2022
Markets ended the week with a relief rally, recovering only a fraction of the decline in previous sessions, after a week dominated by monetary policy decisions by major central banks and fears among investors of an economic recession.
- Markets ended the week with a relief rally, recovering only a fraction of the decline in previous sessions, after a week dominated by monetary policy decisions by major central banks and fears among investors of an economic recession.
- In a report to Congress, the US Fed noted its commitment to restoring price stability is “unconditional”. Separately, a number of FOMC members (Minneapolis Fed Neel Kashkari and St. Louis Fed James Bullard) said that a similar rate hike (75 bp) could be approved in July, if necessary. In the eurozone, HICP inflation was confirmed at 8.1% y/y in May.
- In this context, volatility declined and equity prices recovered modestly, while sovereign bond yields continued to fall across Europe, more notably in the periphery countries. The USD appreciated further against the EUR.
- This week, Fed Chair Jerome Powell will testify in the Senate on Wednesday. On the data front, flash PMIs for June across advanced economies will be released on Thursday. The German IFO survey will follow up on Friday.