Anything interesting going on that could affect markets?

IMO this is just a “check the box” question. As long as it is a current event (ie inflation, OPEC deal, what above said, etc.) and you add some substance to it you will be fine.

Example- if a few weeks ago you were to mention how OPEC wasn’t able to come to terms on new production levels. This decision will cause issues in xyz because of xyz. Then you are probably fine.

Just shows you are up to date and can form an opinion. I never liked these either haha, but I found I was over complicating it. Only thing I will add is if you bring up something like rates, be able to talk about why they raise/lower rates and the overall impact it has on the economy.

If you're interviewing for M&A, I'd be less concerned about the markets and more concerned about a deal that the bank you're interviewing at recently did...common misconception that M&A bankers work with the market a lot. Yes, obviously the market has an influence on M&A activity, but that's more for traders, cap markets, etc. professionals. Focus on a recent deal that they did and be prepared to answer why it's interesting to you (strategic rationale of the deal)...also a larger deal that's going on in the market right now can't hurt

This is literally a question to see if you spend your time actually awake or on TikTok all day long.  If you can say ANYTHING AT ALL like policy changes, budget deals, international headlines (Afghanistan, Iran vs. Israel rhetoric, etc), Fed policy, anything with commodities or inflation.  Literally anything. Do you do pay attention to anything at all. in the universe. ever.

I would talk about inflation and then link it to tapering and the fed raising rates. Changes in the 10 year treasury yield have very important valuation implications. Essentially every risk asset is priced off of the 10-year treasury. CAPM calculates cost of equity by essentially adding a risk premium over 10 yr. Corporate debt is also priced as a spread over treasury yield (a bit more nuanced though given you discount each coupon as if it was a zero coupon bond and use corresponding treasury spot rate). Higher nominal yield would significantly impact the valuation of companies whose cash flows are long dated (essentially any tech company or company where terminal value represents entire valuation). In a risk-off environment, corporate spreads tend to widen as well. Spreads are currently at historic lows, especially for low rated issuances. A lot of M&A activity is financed with low rated bonds, so increase in spreads would increase cost if financing and the issuance might be a bit harder to place. 

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