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.
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In the last session of the week, investors traded in a cautious mood as they continued to digest the Fed's more dovish and patient tone.
Trade tensions between China and the U.S., the extension of the U.S. government shutdown and positive surprises in the earnings season determined yesterday investor's mood.
Financial markets were less volatile in the first session of the week as investors digested the latest Jerome Powell's comments on the upcoming official interest rate moves (more flexible and aware to risks).
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.
Markets ended the week on a risk-off note. Stocks tumbled, led by a selloff in technology equities, while oil and gas prices jumped amid investor concerns about a potential escalation of the Middle East conflict. U.S. and German sovereign yields nudged down, driven by safe-haven flows, while euro area peripheral spreads widened, and the USD and the EUR weakened.
Yesterday, stock markets rallied around the world while 10-year sovereign yields remained stable in the U.S. and declined in the Euro Area (particularly so in the periphery countries).
Markets rebounded on Monday as geopolitical fears eased amid signs that Iran was seeking to end hostilities with Israel. Sovereign yields fell modestly across the eurozone with peripheral spreads narrowing slightly, as news that the EU would be willing to accept a broad 10% tariff on EU goods from the US were dismissed by the European Commission.
With investor focus on the tech sector, equity markets moved lower during the session. US stock indices posted modest losses, with tech stocks under pressure as investors continued to digest Q4 earnings results. European indices were weighed by losses in business software companies amid concerns over the potential disruptive impact of AI on their business models.
Global stock markets performed positively and the main indices registered moderate gains, with the exception of the IBEX 35 and the Turkish BIST 100, which lost 0.4% and 3.0% respectively.
Investors traded cautiously on Wednesday, digesting the December inflation print in the US, which showed headline inflation rising to 7.0%, highest since June 1982, and core inflation increasing by 0.6 pp to 5.5% yoy. Even if in line with consensus expectations, these figures add pressure to the Fed to start hiking interest rates as soon as in March.
Stock markets in advanced economies registered losses in the last session of the week, as investors' concerns on trade tensions increased following the comments of the U.S. President, Donald Trump.
In yesterday's session, investors' sentiment improved and recovered from Monday’s lows amid upbeat corporate results. Stock indices in the euro area and in the US rose as traders bought the dip (the S&P 500 registered its biggest daily increase since March).
Markets ended the week in a mixed mood as investors pondered over the Fed's plans for stimuli withdrawal, risks from China's Evergrande and the announcement that Chinese authorities will ban all transactions and mining related to cryptocurrencies. Global stocks declined or closed flat while the USD rose against most AE and EM currencies.
Global stock markets were mixed yesterday with the main European indices edging down (except for the Portuguese PSI 20 and the Ibex 35) and the S&P gaining 0.2%.
Yesterday, global markets ended the session on a cautious footing as mounting tensions in the Middle East and renewed trade uncertainty weighed on investor sentiment. European equities edged lower amid broad risk-off flows, while U.S. markets remained shut in observance of Juneteenth. In fixed income, eurozone sovereign yields rose, particularly at the long end of the curve, while peripheral spreads widened.
Without relevant macro data to trade on, no advances in negotiations to reopen the US government, nor any new developments in France, markets traded cautiously during yesterday's session. Euro area sovereign yields ended mostly flat while US Treasury yields edged lower, and stocks retreated globally. The euro weakened to 1.16 against the dollar.
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Central banks took center stage, with a broadly hawkish tilt across major economies. The ECB left the depo rate unchanged at 2.00%, as expected, but highlighted stagflationary risks stemming from the Middle East conflict. Euro area sovereign yields edged higher, as markets now fully price in two rate hikes in 2026, while the euro recovered and equities declined sharply.
Yesterday, global financial markets delivered a mixed performance, shaped by judicial developments in the United States and uneven economic data. In the US, an initial court ruling blocked most of President Trump’s tariffs, only for a federal appeals court to later reinstate them, injecting renewed uncertainty into ongoing trade negotiations.