- Positve mood in developed markets: US assets continued their positive trend, while political noise calmed, so far. Meanwhile some EMs remained under pressure despite the sharp rebound in oil prices, at their highest since 2014. The consolidation of the 3% threshold in 10Y US yields and the slight appreciation of the USD weighed.
- The 10Y UST yield surpassed 3.10% during the session, favoured by the increase in oil prices. The rebound in interest rates seems to have had a mild impact on equity indices, since the US volatility index remained below 13% (VIX) even after the renewed geopolitical tensions.
- In the Eurozone, yesterday’s abrupt movement in debt markets halted. The 10Y German yields remained stable, hovering around 0.60%, while peripheral risk premia remained stable although with some volatility in Italy during the session as political concerns are expected to remain. This driver also caused a slight underperformance in Italian stocks due to political tensions, but they were still in positive territory.
- Regarding the FX market, the USD remained strong against EM and major currencies.The EUR had even fallen below 1.18 USD during the day, while EM currencies depreciated across the board. The increase in oil prices only contributed to mitigate the depreciation of some related currencies. Some EM central banks have already taken some measures to prevent further deterioration, such as Bank of Indonesia, which hiked rates for the first time in four years.
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