12 December 2022

Markets, great expectations for ECB and Fed

What we could call a week of transition has just passed. All eyes are on the decisions to be taken in the coming days by the ECB and the Fed. Expectations are for a more moderate rate hike than previous ones. The week’s macro data did not help clear the air, with better than expected numbers from Europe and US producer prices falling but at a slower pace than expected.

Against this backdrop, recoveries in the equity and bond sectors cooled. Overall, let’s see how our analysis has changed.

In the past week, 23% of the instruments and indices used for our analyses showed a positive change. 76% experienced a negative change. Analysing by macroclass, 19% of the equity instruments and indices recorded a positive weekly change. 16% of bond instruments and 44% of the other asset classes used for our analysis.

Improving valuations in the past week accounted for 11% of the total. The previous week, valuations that had been adjusted upwards were 18% of the total.

Among the equity analyses, improving valuations accounted for 8% of the total.

In the bond segment, 19 per cent of the total were upgraded valuations. Here there was a slowdown in government bonds, with yields recovering on the long side.

Among analyses of other asset classes, improving valuations accounted for 29% of the total. These analyses included currencies, commodities and market sentiment.

Of the valuations, 12 per cent were above average in the short term. 32% were above the long-term average of valuations. Last week it was 17% and 39% respectively.