Financial Markets Daily Report
23 November 2022

Investors turned more positive during a risk-on session on Tuesday. The key themes remained the potential moderation of interest rate hikes by central banks, COVID outbreaks in China and volatility in energy markets.

FMDR
  • Investors turned more positive during a risk-on session on Tuesday. The key themes remained the potential moderation of interest rate hikes by central banks, COVID outbreaks in China and volatility in energy markets.
  • In particular, natural gas prices in Europe (TTF) picked up following news reporting Russia may restrict gas supplies to Europe through Ukraine later this month. In addition, the EU Commission proposed an emergency cap of 275 EUR/MWh on natural gas prices to prevent volatility. Oil prices also edged higher.
  • In the US, Fed officials (San Francisco and Cleveland) said inflation remains the main goal but the central bank should be mindful of the lags in the policy changes, while hinting at the possibility of reducing the pace of rate hikes.
  • In this context, stocks rose, sovereign bond yields ticked down and the USD depreciated. Today, the focus turns to the flash PMIs for November across advanced economies.  The Fed will also release the minutes of the last meeting.
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