Financial Markets Daily Report20 October 2023
In yesterday’s session, investors once more weighed the growing tensions in the Middle East and the future path of interest rates. Fed Chair Jerome Powell said the central bank would proceed carefully with rates, highlighting that the rise in yields in bond markets is helping to tighten financial conditions.
- In yesterday’s session, investors once more weighed the growing tensions in the Middle East and the future path of interest rates. Fed Chair Jerome Powell said the central bank would proceed carefully with rates, highlighting that the rise in yields in bond markets is helping to tighten financial conditions.
- Markets have lowered the probability of a rate hike in December from 40% to 23%, expecting rates to be held at current levels. As a result, the 10Y treasury yield rose 8 bps almost reaching 5%, but the 2Y yield dropped. In the euro area periphery countries’ yields fell and German rates were mostly unchanged.
- Elsewhere, global equities extended their decline from the previous session following some disappointing 3Q earnings results. In commodities, oil prices jumped to above $92 per barrel amid uncertainty over developments in Gaza and a softer US dollar. The euro rose to $1.058.