Thursday's session carried a sharply divergent tone between the two sides of the Atlantic. France's risk premium reached 140 bps as investors intensified their fiscal concerns and continued to lead a widening in sovereign spreads, with yields on German Bunds dropping amid safe-haven flows. European stocks fell markedly, with France leading losses.
In the U.S., Treasury yields hit new highs but then reversed on the back of a correction in market-based Fed expectations. U.S. equities eked out modest gains, and the dollar continued to strengthen against the major currencies. In commodity markets, oil and gas prices remained under pressure on persistent geopolitical risk.
Market-implied odds of a Fed rate hike in October dropped below 30% as Fed Vice Chair Jefferson signaled no urgency for the next rate hike, echoing previous comments from NY Fed President Williams. On the data front, today the focus will be on the release of euro area-wide inflation figures, as well as the U.S. September labor market report.
BANCO BPI, S.A., com sede na Avenida da Boavista, 1117, 4100-129 Porto; Capital Social: € 1 293 063 324,98; matriculada na CRC Porto sob o número de matrícula PTIRNMJ 501 214 534, como o número de identificação fiscal 501 214 534. Intermediário financeiro registado na CMVM com o n° 300 e no Banco de Portugal sob o código n° 10. Agente de Seguros n.º 419527591, registado junto da Autoridade de Supervisão de Seguros e Fundos de Pensões em 21/01/2019, e autorizado a exercer atividade nos Ramos de Seguro Vida e Não Vida.