Financial Markets Daily Report 31 August 2022
Investors continued to trade with a risk-off mode, taking on board new hawkish comments from central bank officials and data showing job openings in the US unexpectedly rose in July. In addition, the flash HICP readings for both Spain and Germany showed inflation remained elevated in August (the eurozone aggregate will be released today).
- Investors continued to trade with a risk-off mode, taking on board new hawkish comments from central bank officials and data showing job openings in the US unexpectedly rose in July. In addition, the flash HICP readings for both Spain and Germany showed inflation remained elevated in August (the eurozone aggregate will be released today).
- Fed officials (NY Fed John Williams and Richmond Fed Thomas Barkin) echoed a message by chairman Powell, noting that the central bank will continue to hike interest rates into restrictive territory and will aim to keep them elevated.
- Separately, Dutch central bank governor Klaas Knot and Estonia's Madis Müller both said that a 75 pb interest rate hike should at least be discussed at the upcoming policy meeting at the ECB next week.
- In this context, equity prices fell further, sovereign bond yields ticked up while the EUR continued to hover around parity against the USD. In commodity markets, prices of both natural gas in Europe (TTF) and oil (Brent) declined.