Financial Markets Daily Report

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Investor sentiment worsened slightly in a context of persisting trade tensions and mixed corporate earnings releases.

Trade tensions, monetary policy and economic data releases were the drivers of yesterday session.

Financial markets started the week with caution as they await for more earnings releases, which will be a key driver of stock markets in the next sessions.

Investors traded cautiously in the last session of the week and stock indices rose mildly in most euro area trading floors and in the US (where the S&P 500 reached a new record high).

Stocks were mixed and sovereign yields ticked up as investors digested messages from central banks and a solid U.S. June inflation reading (headline: 1.6%; core: 2.1%).

In U.S. markets, stocks advanced and sovereign yields declined for short-maturity treasuries (the U.S. sovereign curve steepened) as messages from the U.S. Federal Reserve made investors confident that the Fed will cut rates soon.

Markets traded cautiously in a session with few economic releases.

Investors started the week on a prudent note as they reassessed expectations of a Fed rate cut in the light of recent strong U.S. labor market data.

Markets ended the week on a cautious note after a strong U.S. labor market report made investors hesitant about whether the Fed will cut rates in its July meeting.

In yesterday session, trading volumes were well below average as US financial markets were closed due to the Independence Day.

Investor sentiment improved in yesterday's session with the expectation of an extension of the accommodative monetary policy stance. Analysts expect Christine Lagarde to follow Mario Draghi's approach and provide monetary stimulus in the coming quarters.

In yesterday's session, investors traded in a cautious mood and demand for safe haven assets increased.