Financial Markets Daily Report
21 November 2022

Investors closed the week trading cautiously, still digesting the hawkish rhetoric by some key Fed officials (St Louis Fed James Bullard) and data showing a further decline in home sales in the US in October.

FMDR
  • Investors closed the week trading cautiously, still digesting the hawkish rhetoric by some key Fed officials (St Louis Fed James Bullard) and data showing a further decline in home sales in the US in October.
  • In the eurozone, ECB president Christine Lagarde said that the ECB may need to bring policy rates to restrictive territory, even if adjusting it at a slower pace. She added that the ECB may start to reduce its balance sheet soon.
  • In this context, sovereign bond yields rose in the US, more notably in the short end of the curve, while ticking down across the eurozone. Equity prices advanced modestly. In commodity markets, oil prices continued to edge down due to concerns about the deterioration of the COVID situation in China.
  • This week, the focus will turn to the minutes of the last meetings of both the Fed (Wed.) and the ECB (Thu.). On the data front, the flash PMIs for November will be released on Wednesday. Markets are closed in the US on Thursday.
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