Financial Markets Daily Report
14 junio 2023

A larger-than-expected decline in US inflation in May, from 4.9% yoy to 4.0%, increased the odds investors attach to a pause in the Federal Reserve interest rate hikes at todays meeting. Nevertheless, core inflation declined by less than expected, from 5.5% yoy to 5.3%, pushing the Fed to, at the very least, maintain a hawkish tone.

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  • A larger-than-expected decline in US inflation in May, from 4.9% yoy to 4.0%, increased the odds investors attach to a pause in the Federal Reserve interest rate hikes at todays meeting. Nevertheless, core inflation declined by less than expected, from 5.5% yoy to 5.3%, pushing the Fed to, at the very least, maintain a hawkish tone.
  • In this context, equities rose in most advanced economies trading floors (with the S&P 500 and the Nasdaq reaching 14-months maximums) while yields on sovereign bonds rose on both sides of the Atlantic. Elsewhere, the USD weakened against most currencies and the euro fluctuated below $1.08.
  • In commodity markets, brent oil prices rose by more than 3% on hopes that Chinese demand will increase after the PBOC cut interest rates by 10bp last night. In Europe, natural gas prices rose above 36€/MWh.
  • Today the focus will be on the FOMC meeting, where we expect a pause in the hiking cycle.
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