Risk-on mode in financial markets during yesterday's session, as December US CPI data signaled cooling core inflation. Headline CPI rose 0.2pp to 2.9% (+0.4% mom), as expected by consensus, while core CPI, expected to stay at 3.3% yoy (+0.3% mom) fell to 3.2% (+0.2% mom).
In this context, investors fully priced in one interest rate cut by July. US sovereign bond yields fell strongly, alleviating fears of 10-Year bonds surpassing the 5% yield barrier. Equities rallied as a response, with main stock indices gaining more than 1.5%, erasing earlier weeks´ losses. In the Euro area, market sentiment was similar, as 10-year sovereign bonds yields dropped in the range of 9-15bps in the main economies. Stock markets also recorded gains. In currency markets, the euro slightly fell against the dollar. In commodities, Brent prices registered slight gains on news of a ceasefire in Gaza.