Financial Markets Daily Report27 July 2022
Risk aversion continued to set the tone across financial markets on Tuesday as investors took position ahead of the Federal Reserve’s policy meeting today, with money markets pricing another 75 bp hike in the policy rate.
- Risk aversion continued to set the tone across financial markets on Tuesday as investors took position ahead of the Federal Reserve’s policy meeting today, with money markets pricing another 75 bp hike in the policy rate.
- In its updated World Economic Outlook, the IMF cut its global growth forecasts (–0.4 pp to 3.2% in 2022 and –0.7 pp to 2.9% in 2023) while noting that the risks to the outlook are overwhelmingly tilted to the downside.
- Further weighing on sentiment, US data in new home sales (–8.1% m/m in June) and consumer confidence (the Conference Board's index fell by 2.7 points to 95.7 in July, the lowest level since feb-2021) surprised to the downside.
- In this context, both stocks and sovereign debt yields edged lower, while the USD appreciated modestly, nearing back to parity against the EUR. European natural gas prices continued to rise, despite the deal reached by EU officials for cutting demand by 15% in winter.