Yesterday all eyes were on Trump's tariffs announcement, which took place after US markets had closed. Trump finally set tariffs close to the worst expectations, with a 34% tariff for China, 20% for the EU and 24% for Japan. Asian equities are down at today's session (Nikkei around -3%), while stock index futures for Europe and the US point to similar losses.
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Yesterday marked the third consecutive session with an intense risk-off mode and high volatility in financial markets amid heightened tariff uncertainty and ongoing fears of a global economic slowdown. In this context, sovereign bond yields increased on both sides of the Atlantic, with euro area peripheral risk premia edging higher.
Global markets endured heightened volatility on Thursday following President Trump's surprise announcement of a 90-day suspension of tariffs for most countries, excluding China. The European Union responded by delaying the implementation of its reciprocal measures.
Financial markets saw a mixed session as investors navigate trade policy unpredictability and weigh the economic outlook. In the euro area, industrial production rose +1.1% mom in March, while the German ZEW economic sentiment index registered its largest monthly decline since 2022 due to uncertainty derived from US tariffs.
Global financial markets had a subdued start to the week on Easter Monday, with only the US and Asian markets open, while European markets remained closed.
Investor risk appetite recovered somewhat on Tuesday. In the Eurozone, government bond yields fell as several ECB officials commented that inflation could stabilise at its 2% target sooner than expected just a few weeks ago. The US Treasury curve steepened, as short-term yields rose as traders bet that the US could strike some favourable trade deals with key partners.
Investors' risk appetite rebounded slightly last week, a trend that largely continued into Friday's session. In the eurozone, government bond yields rose slightly, even though ECB's Holzmann, who had been advocating for a pause in rate cuts, acknowledged the disinflationary impact of tariffs and said the ECB's next rate decisions were "completely open".
Financial markets were mixed during yesterday's session. In the US, sovereign bond yields decreased, reaching a three-week low as investors gained confidence the US Administration is searching for a tariff de-escalation through trade deals. In the euro area, sovereign yields increased, despite ECB officials warning uncertainty due to a trade war will bring lower growth.
Euro area financial markets were closed during yesterday’s session for May 1st holiday. In the US, a better-than-expected ISM manufacturing index, which also showed signs that input prices have been kept elevated due to tariff policy, lowered expectations of four interest rate cuts in 2025 and sent US Treasury yields higher.
Investors kicked-off the week with a quiet session following last week's heavy-data week, which included US Q1 GDP and euro area inflation. This week, markets' attention will shift back to central meetings. The Fed is expected to hold rates steady in Wednesday, and the BoE is expected to deliver a 25bp rate cut on Thursday.
Investors traded cautiously during yesterday's session despite some political noise in Germany, where Frerich Merz was finally elected chancellor in a second round of voting, after having surprisinly lost in the first round. Euro area sovereign bond yields edged only slightly higher, peripheral risk premia held steady, and the region's main equity indices ended lower.
Concerns over the US fiscal stance and debt burden—intensified by recent credit rating downgrades and ongoing tax bill negotiations in Washington—weighed on US financial assets. US Treasury yields rose, particularly on the longer end of the curve, while US stocks fell by more than 1.5%. The US dollar weakened, trading around 1.13 against the euro.
Relatively quiet session in financial markets, with no major macroeconomic data released and U.S. markets closed for Memorial Day. Sentiment in the euro area was supported by President Trump’s decision to extend the deadline for imposing 50% tariffs on EU imports to July 9, easing immediate trade tensions.
Financial markets were mixed during yesterday's session, ahead of May US CPI data to be released tomorrow. US and euro area sovereign bond yields closed the session slightly lower. Separately, news that Japan would be considering buying back bonds with very long maturity to prevent abrupt rises in bond yields, weighed on Japanese yields.
Markets were mixed in yesterday's session as investors digested Trump's delay of the tariff deadline to August 1. The main U.S. stock indices were little changed, while European stocks rose across the board. The USD was stable against a basket of currencies and the EUR continued to fluctuate around $1.17.
Investors traded in a mixed mood in a session in which Donald Trump threatened a 35% tariff on Canada (for goods outside USMCA) and floated the idea of a 15%-20% global baseline tariff rate (currently, 10%). Stocks advanced modestly in the U.S. but declined in Europe. Sovereign yields rose, and the EUR weakened and traded below $1.17 (touching 10-day lows).
Investors ended the week with a risk-off session as trade tensions continued to escalate. Over the weekend, President Trump threatened 30% tariffs on EU and Mexican imports beginning August 1st. Stocks fell across the board, sovereign yields rose and the dollar strengthened, leaving the euro trading just below $1.17.
Investors traded cautiously amid trade tension escalations and heightened uncertainty, with all eyes on today's U.S. CPI report for June. The market's reaction to tariff threats was rather muted, with sovereign yields edging higher on both sides of the Atlantic, and equity markets posting slight gains in the U.S. and slight losses in the euro area.
Markets had a choppy session yesterday. News reports that President Trump was considering firing the Fed Chairman sent jitters across markets, pushing Treasury yields higher and the dollar lower. Trump later denied the rumors and Treasuries recovered, while the dollar did not fully erase losses and by the end of the session the euro was close to $1.16.
Markets ended the week in a cautious mood. Stocks were mixed, with European indices suffering moderate losses while the S&P 500 ended largely unchanged after having dipped earlier in the session. The earnings season kicked off with mostly solid results. Bitcoin closed "Crypto week" little changed (Trump signed the GENIUS Act on Friday).