Daily Report

12 de Julho de 2024
Financial Markets | daily report 12.07.2024
  • Yesterday's session centered around the June inflation report from the US: inflation cooled to 3.0% in June (from 3.30% in May) and core inflation fell to 3.3% from 3.4% last month. On a monthly basis, prices fell -0.1%, the first negative rate in four years. Markets are discounting two interest rate cut from the Fed in 2024, and a 40% probability of a third cut.
  • The inflation report sent Treasury yields lower, with the 2-year benchmark falling by more than 10 bp. The main US equity indices fell, dragged down by large tech companies, as investors rotated out of mega-caps into smaller companies on optimism of Fed cuts. The small cap index (Russell 2000 index) was up 3.5% yesterday.
  • Optimism in bond markets spread to the euro area, where sovereign bond yields also ended the session lower, and equities rose. Bank of France Governor Villeroy said yesterday the ECB is on a good track on inflation but warned about uncertainty over the outlook.