Yesterday investors traded on a risk-on mood on the back of an historical agreement in the EU. The €750bn stimulus plan agreed will consist of €390bn in grants and €360bn in loans.
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Financial markets started the week with a mixed session. In Europe, investors traded with a risk-off mood while in the US riskier assets benefited from progress in the negotiations for a new fiscal stimulus package and hopes for a COVID-19 vaccine.
Yesterday, investors in the US traded with optimism as the Federal Reserve kept its official interest rates unchanged and reiterated its intention to "act as appropriate to support the economy".
In the last session of the week, investors continued to digest the Federal Reserve's new inflation approach, in which it will be more tolerant to inflation increases.
Economic indicators favored a greater risk appetite in yesterday's session. China's industrial output rose +5.6% yoy in August while retail sales grew +0.5% and surpassed 2019 levels for the first time since the COVID-19 outbreak. Also, German investor sentiment continued to improve in September according to the ZEW index.
Market risk appetite declined in yesterday's session as investors continued to digest the outcome of the Fed meeting. Stock markets declined across advanced and emerging economies while the safe-haven JPY appreciated.
In the last session of the week, investors traded with a downbeat tone and stock indices declined across Europe and, following a tech sell-off, in the US. Asian equities, instead, increased mildly.
In yesterday's session, investors traded with a risk-off mood amid concerns of growing COVID cases around the globe. Powell's speech in Congress in which he stated that the US economy is improving failed to provide much relief to investors, as he also said that there is a long way to go before a full recovery.
Yesterday's trading session was mixed and investor sentiment was dominated by news of Brexit negotiations resuming and the prospects of further fiscal stimulus in the U.S.
Investor risk appetite was mixed in the last session of the week. Advanced-economy stocks gained but EM equities nudged down, while the USD weakened and commodity prices declined.
New lockdowns in Europe shook investor sentiment yesterday. Volatility jumped to levels not seen since early June and stock markets tumbled across the world (the main U.S. and European indices dropped by close to 4%). Euro area core sovereign yields declined while peripheral spreads rose, and the EUR weakened below $1.18.
In the last session of the week, investors traded cautiously amid growing COVID-19 cases and better-than-expected Q3 GDP releases in the euro area (euro area aggregate +12.7 vs Consensus +9.6; Spain +16.7 vs Consensus +13.5%).
Stock markets soared across the world on Monday as Pfizer and BioNTech announced a breakthrough in their development of a Covid-19 vaccine.
Last Friday, markets ended one of their best weeks since summer as economically-sensitive assets regained momentum on the back of positive COVID-19 vaccine developments.
In yesterday's session, investors traded cautiously amid signs of a slow economic recovery. In the US, initial claims for unemployment benefits rose by 30k in the previous week and minutes from the Fed's November meeting showed how its members discussed how to provide more guidance on QE.
Investors on Monday traded in their gains after one of the best months in decades for stock markets, during which breakthroughs in Covid-19 vaccines boosted stock valuations in sectors affected by the pandemic.
Yesterday's trading session was dominated by news that Democratic congressional leaders in the US expressed support for a $908bn additional stimulus plan proposed by a bipartisan group of US senators. The US Treasury yield curve steepened, with the difference between yields on 10-year bonds and 2-year bonds reaching a 3-year high.
Yesterday's trading session was dominated by news that Pfizer had halved the amount of Covid-19 vaccines that it hoped to distribute in 2021 due to supply chain issues, which provoked a late-afternoon sell-off in the S&P 500 which closed 0.1% lower on the day.
Investors ended the week in a favorable mood and stocks rose across the board on Friday. U.S. stocks also closed higher despite signals that the labor market is losing steam (non-farm payrolls increased by 245k in November vs 610k in October) as investors focused on prospects of a new fiscal package.
Financial markets ended the week with a downbeat tone as investors considered Joe Biden's $1.9 trillion relief plan and the negative evolution of the pandemic.