Evolution of the international financial markets and evaluation of the main events and economic indicators of the previous day session. Available in English.
In yesterday's session, investors traded with an optimistic mood following positive economic sentiment data releases for June in the euro area (EC Economic confidence rose from 114.5 to 117.9) and in the US (Conference Board consumer confidence at 127.3 from 120.0).
In yesterday's session, investors' sentiment worsened as COVID-19 infections increased in some parts of Asia and Europe, despite the vaccination campaign, and some countries imposed new limits to travel, especially from the UK.
In the last session of the week, positive economic data releases helped to improve investors' sentiment. June's consumer confidence in Germany rose to its highest level since August 2020 while in Italy it reached a record not seen since November 2018.
Investors ended the day with positive results, after strong sentiment data in Europe (Germany’s Ifo business climate index rose to the highest level in two years) and labour statistics in the US (new jobless claims fell to 411,000 weekly). In addition, President Biden announced a deal in the Senate on an infrastructure package worth USD 1.2 trillion.
Financial markets extended the gains on Tuesday, with investors' sentiment boosted by dovish comments on inflation and monetary policy from some key Fed officials. As a result, stocks in the US fluctuated around record highs while the decline in US treasury yields stabilized. In Asia, equity indexes advanced further on Wednesday.
In the first session of the week after the Fed meeting, monetary policy and inflation remained the key focus for investors. Robert Kaplan and James Bullard explained that starting the tapering discussion was positive while Jerome Powell noted that the Fed will keep stimulus in place for as long as it takes to complete the recovery.
Investors ended the week on a negative note, extending the losses after the change of tone by the Fed during the 15-16 June monetary policy meeting. In stock markets, the S&P 500 edged down by 1.3%, reaching a 4-week low. Future prices and the heavy losses during the Asian session point to further declines on Monday.
Investors are now debating when the Fed is likely to start trimming its monthly bond purchases, while the Bank of Japan announced it will unveil a new tool to support efforts to address climate change.
The Fed held its benchmark short-term interest rate and said it will continue to buy $80 billion in Treasury securities and $40 billion in mortgage-backed securities each month. Policymakers now see the first rate increase coming in 2023 instead of 2024.
Yesterday, the prevailing mood in the financial markets was calm before the end of Federal Reserve's meeting. Investors expect the central bank to keep the pace of asset purchases unchanged until at least August or September.