Financial Markets Daily Report22 June 2023
Yesterday’s session was marked by speeches from several central bankers. In the US, Fed Chairman Jerome Powell noted in his speech to Congress that he would not characterize last week’s decision as a pause, noting that additional 50 bp rate increases are a good guess of where monetary policy is headed, in line with the updated Dot-Plot.
- Yesterday’s session was marked by speeches from several central bankers. In the US, Fed Chairman Jerome Powell noted in his speech to Congress that he would not characterize last week’s decision as a pause, noting that additional 50 bp rate increases are a good guess of where monetary policy is headed, in line with the updated Dot-Plot.
- In Europe, ECB GC members Schnabel and Nagel noted that stubborn inflation and a tight labour market may require a protracted period of higher rates, while Villeroy de Galhau hinted at high rates for longer over further hikes. In the UK inflation surprised to the upside, putting pressure on the Bank of England to raise interest rates further today.
- Amidst this background bond yields edged up across the board in Europe. Short-term bonds in the US edged higher too, while long-term ones remained flat. Major stock indexes were largely down, although the good performance of the financial sector allowed the IBEX or the MIB to remain flat. The euro appreciated against its peers.