Financial Markets Daily Report22 April 2021
Yesterday, investors traded with cautious optimism after two days of consecutive declines in stock markets. The announcement that the German constitutional court will not initially block the NGEU package (€750bn) contributed to investors' optimism. Opposition argued that the EU was exceeding its powers by issuing such large amount of debt.
- Yesterday, investors traded with cautious optimism after two days of consecutive declines in stock markets. The announcement that the German constitutional court will not initially block the NGEU package (€750bn) contributed to investors' optimism. Opposition argued that the EU was exceeding its powers by issuing such large amount of debt.
- In this context, equities rose in Europe and America but declined in Asia. In fixed-income markets, core euro area and US sovereign yields were broadly unchanged while peripheral spreads narrowed.
- In FX markets, the euro weakened modestly against several advanced economies' currencies (except against the GBP and the Swiss franc) and fluctuated around $1.20.
- Today, investors will focus on Christine Lagarde's press conference searching for clues on the PEPP path after June. We don't expect the ECB to anticipate any changes to its monetary policy stance today.