Evolution of the international financial markets and evaluation of the main events and economic indicators of the previous day session. Available in English.
Investors traded with a positive tone in yesterday's session as March PMI data surprised on the upside in most regions, particularly in the euro area (Composite Index 52.5 vs 48.8 in February). The advance was more robust in the manufacturing sector, although the services index also increased.
In yesterday's session investors traded with a less optimistic tone amid rising global COVID-19 cases and new lockdown measures in Germany. Additionally, Fed President Jerome Powell played down concerns of an overheating US economy as he said that the increase in inflation "will be neither particularly large nor persistent".
In yesterday's session, volatility declined, US stock indices rose led by gains in the tech sector and euro area equities were mixed.
In the last session of the week, investors traded cautiously as they continued to weigh accelerating economic growth and inflation expectations for the US. In this context, the S&P 500 ticked down, the Nasdaq rose and euro area indices declined following previous' day losses in the US.
European equities performed well on Thursday after the Federal Reserve raised its growth forecast for the US, and the Eurostoxx50 rose 0.5%. Banks and automakers led the gains, as they are favored by rising market interest rates.
During yesterday's meeting, the Federal Reserve sharply upgraded its forecasts for growth in the U.S. and signalled that interest rates would remain unchanged until at least 2024 and that it would continue to buy bonds at a pace of $120 billion per month until it made "substantial further progress" towards its goals.
Investors traded in a positive mood yesterday as the European stock market rose 0.6% on the back of good earnings reports and positive soft data. In Germany, the ZEW business expectations index rose to 71.2 in March from 61.8 in February, its highest level in months. Euro area periphery sovereign yields widened slightly.
European stocks and bond yields fell yesterday as Italy, France, Germany and Spain suspend vaccinations with the AstraZeneca vaccine over worries about the jabs' side-effects. Meanwhile, Italy has taken more stringent lockdown measures. The Eurostoxx50 was down by 0.1%.
The U.S. bond sell-off continued last Friday after President Joe Biden said every U.S. adult would be eligible for a Covid-19 vaccination by May 1st and set July 4th Independence Day as a new target for a return to normality.
Markets traded in a risk-on mood as investors signaled greater optimism about the economic recovery and lower concerns over inflation risks in yesterday's session. Volatility declined, stocks rose across advanced and emerging economies and tech-equities resumed their rally. Commodity prices also gained amid greater risk appetite.
Stocks rose across the board as Biden's $1.9tn fiscal package won final approval in the U.S. Congress and CPI data calmed inflation worries. In particular, U.S. CPI inflation rose to 1.7% yoy in February but core inflation nudged down to 1.3% (see our take and why we expect inflation to be under the spotlight in the coming months here).
Investors traded in a positive mood as the OECD signaled a brighter economic outlook. According to its updated forecasts, the world economy is set to grow by 5.6% and 4.0% in 2021 and 2022. The OECD estimates that spillovers from the U.S. fiscal stimulus will add more than 1pp to global growth.