Financial Markets Daily Report22 September 2023
During yesterday’s session investors largely digested the Fed’s hawkish pause on Wednesday, positioning further into the narrative of a soft landing for the US economy and higher interest rates for longer. Thus European and US government bond yields rose in the medium and long term, and either fell or remained unchanged in the short term.
- During yesterday’s session investors largely digested the Fed’s hawkish pause on Wednesday, positioning further into the narrative of a soft landing for the US economy and higher interest rates for longer. Thus European and US government bond yields rose in the medium and long term, and either fell or remained unchanged in the short term.
- Against this backdrop, risk assets suffered the most, with major equity indices around the world posting declines. Crude oil prices fell and so did commodities as a whole, also dragged down by gold. The European natural gas benchmark however, the Dutch TTF, rebounded in a volatile environment on supply concerns.
- Meanwhile, in the FX market, the euro was flat against the dollar but appreciated against other major peers such as the Swiss franc and especially the pound, which weakened after the BoE unexpectedly left interest rates unchanged yesterday. The yen appreciated against the dollar ahead of today’s BoJ meeting, which also left rates unchanged.