Financial Markets Daily Report

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Markets continued to reduce their risk appetite after yesterday's release of Chinese indicators and as investors reassess the prospects of closing a U.S.-China deal soon.

Markets tilted towards a risk-off mood in a session dominated by U.S. news. U.S., German and other core sovereign yields declined, euro area peripheral spreads widened, safe-haven currencies (such as the CHF and the JPY) appreciated against the USD (while the euro was roughly stable), and stocks exhibited a poor performance globally.

Markets exhibited a somewhat more positive mood on the back of recovering sentiment indicators and as investors continued to eye trade talks developments.

Markets started the week on a cautious mood as concerns that the U.S. and China are struggling to close the first phase of a trade deal weighed on sentiment.

Markets ended the week with a mixed session in which there were no major economic releases.

On the back of advances in the trade negotiations between the U.S. and China, investor's risk appetite increased in yesterday's session.

In yesterday's session, the positive mood that investors showed in the previous days seemed to abate.

The appetite for risk that investors showed in the previous sessions seemed to moderate on Tuesday and risk-on flows were more contained.

Despite the weakness shown in the sentiment indicators for some euro area countries, investors' optimism on trade tensions fuelled risk-on flows.

Financial markets ended the week in a positive tone fuelled by better-than-expected data released in the main advanced economies.

Markets were mixed as investors eyed the Fed meeting. Ahead of its decisions, European stocks declined moderately and sovereign yields were little changed.

Markets exhibited a more cautious tone in yesterday's session, leading stock markets to a mixed performance across advanced and emerging economies.