Financial Markets Daily Report
30 March 2023

Investors traded with a risk-on mood on Wednesday. The main drivers were a rally in tech stocks, boosted by the restructuring plans from China’s Alibaba Group, as well as receding fears of contagion from the banking turmoil.

FMDR
  • Investors traded with a risk-on mood on Wednesday. The main drivers were a rally in tech stocks, boosted by the restructuring plans from China’s Alibaba Group, as well as receding fears of contagion from the banking turmoil.
  • In the eurozone, ECB chief economist Philip Lane said more interest rate hikes will be needed if tensions in the banking sector continue to settle down. Separately, fellow Governing Council member, Peter Kazimir, also said further rate hikes are likely but “maybe at slower pace”.
  • In this context, stock indices rebounded across the board while sovereign bond yields were little changed. Oil prices reduced previous gains, even after data showed US crude inventories shrank last week.
  • Today, the focus turns to March’s flash HICP inflation in Spain (reported this morning at 3.1% y/y after 6.0% in February) and Germany, ahead of the release of the eurozone aggregate tomorrow.
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