Markets

It took markets an overnight sleep to realize that the Fed on Wednesday set out the framework for a new era in monetary policy. European yield markets showed some hesitation as EMU PMI’s printed softer than expected. Growth activity is over its peak momentum (composite index eased from 59.0 to 56.1). Supply bottlenecks are further complicating the post-corona rebound, but this also applies to sharp price rises. Bond market bears took control as US traders joined the fray. The Bank of England policy statement only reinforced the idea that policy normalization might come sooner rather than later. UK economic growth recently lost some momentum and the labour market remains a source of uncertainty. Still, accelerating prices made Bailey an Co conclude that some developments since the August meeting strengthened the case for some modest tightening over the policy horizon. Combined with a further risk…

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