Financial Markets | daily report 19.05.2022

Comentário diário | Mercados Financeiros
  • Risk-off sentiment returned to financial markets on Wednesday, as investors reassessed the outlook for the global economy amid the jump in inflation and the rapid withdrawal of monetary policy accommodation. These factors are weighting in the earnings projections of the private sector.
  • Fed Chairman, Jerome Powell, noted that the central bank will raise interest rates until there is “clear and convincing” evidence that inflation is in retreat. Separately, Chicago Fed Charles Evans said that he supports 50bp hike in June and “probably thereafter”. In Europe, Bank of Spain Pablo Hernandez de Cos said he sees policy rates rising this year.
  • In this context, equity indices fell sharply in both sides of the Atlantic, more strongly in the US, while sovereign bond yields dropped back. The USD strengthened against its peers, while commodity prices went down modestly.
  • Today the ECB releases the accounts of its April’s meeting.