Financial Markets Daily Report
30 September 2022

Risk aversion continued to set the tone during a volatile session on Thursday, with the focus turning to the risk of persistency of inflationary pressures and a new round of hawkish commentary from various central bank officials.

FMDR
  • Risk aversion continued to set the tone during a volatile session on Thursday, with the focus turning to the risk of persistency of inflationary pressures and a new round of hawkish commentary from various central bank officials.
  • On the data front, HICP inflation surprised to the upside in Germany, up to 10.9% y/y in September (from 8.8%), which more than compensated the slowdown in the Spanish figure (HICP up by 9.3% after 10.5%) ahead of the release of the eurozone aggregate today. In the US, new jobless claims surprised with another weekly decline.
  • ECB officials on Thursday throw their support for another big interest rate hike at the next policy meeting in October, comments that lifted the EUR exchange rate. In the UK, the government reiterated its plans to implement tax cuts.
  • In this context, sovereign bond yields continued to march higher while stocks fell further. In commodity markets, the oil price ticked down despite news reporting the OPEC+ may consider supply cuts at its meeting next week.
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