Financial Markets Daily Report22 February 2023
On Tuesday, the better-than-expected release of February PMIs fueled an increase in investors’ expectations for the path of official interest rates, which, in turn, pushed sovereign bond yields up in the euro area and in the US.
- On Tuesday, the better-than-expected release of February PMIs fueled an increase in investors’ expectations for the path of official interest rates, which, in turn, pushed sovereign bond yields up in the euro area and in the US.
- Stock indices declined across the board, led by shares in the US. In commodity markets, European natural gas prices fell further below the 50€/MWh level and the price of barrel of Brent declined too.
- In the euro area, despite the fall in manufacturing PMI below the 50-level threshold, the surge in the services index allowed the composite PMI to increase to 52.3 (50.3 in January). In the US, both indices rose, particularly so in the services sector, and the composite PMI increased to 50.2 (46.8 in January).
- Today the focus will be on the release of the minutes of the last Fed meeting, where investors will search for clues on the discussion among members about the level interest rates will need to be raised in order to contain inflation.