Evolution of the international financial markets and evaluation of the main events and economic indicators of the previous day session. Available in English.
Commodity markets continued to trade on a relatively positive note in yesterday's session, as investors remained optimistic about the prospects of the US-Iran agreement. Brent crude prices closed flat, nearing pre-war levels, while TTF natural gas prices fell to EUR 44/MWh, correcting after several days of increases last week.
With no major developments in the peace talks from the Middle East, Friday's session was driven by an increase in risk sentiment, with investors rotating from fixed income to the stock market in the euro area and falling volatility. In the US, markets were closed due to a bank holiday.
Financial markets traded mixed on Thursday as softer-than-expected June payrolls slightly reinforced expectations of a less restrictive Fed stance. June non-farm payrolls showed a sharper-than-expected slowdown in job growth, alongside a decline in labour force participation to a five-year low, while Fed’s Daly indicated monetary policy remains moderately restrictive.
During yestrerday's session, energy prices continued to fall on increased optimism about reaching a long-term peace agreement in the Middle East, after President Trump was positive about the talks held in Qatar. Brent crude and TTF natural gas prices fell below USD 72/barrel and EUR 43/MWh, respectively.
As US-Iran talks resumed yesterday, Brent crude prices closed the session flat, while TTF natural gas prices advanced slightly, to settle above EUR 43/MWh. In other commodities, gold posted its biggest quarterly losses in a decade, closing around 4,000$/once, while market volatility eased.
Contradictory headlines from the Middle East drove Monday’s session. After a weekend in which hostilities surged between the US and Iran, President Trump announced that negotiations were to be resumed on Tuesday. Despite this, energy prices rose, especially TTF natural gas, that settled above EUR 42/MWh, and market-implied volatility dropped.
Investors' risk appetite remained subdued on Friday, as lower oil prices prevailed despite heightened disruption risks in the Strait of Hormuz, where a UK Navy-confirmed tanker strike on late Thursday temporarily raised maritime threat levels.
Risk sentiment improved on Thursday, before late-session Hormuz tensions soured it. In commodities, crude oil prices reversed course and ended the day rising after of a missile strike on a container vessel in Hormuz, while natural gas prices of European benchmarks fell. Gold rose on safe-haven demand.
Wednesday saw a mixed session, as easing geopolitical tensions drove down commodities and sovereign yields, while equities remained pressured by concerns around tech companies' valuations. In commodities, energy prices declined, led by Brent crude, while gold fell on the back of a stronger dollar and higher expected real rates.
On yesterday's session, markets kept a positive tone, as the US-Iran peace talks progressed and the US Treasury allowed Iranian oil sales, easing supply risks. Oil prices fell more than 3%, the dollar rose slightly, while the pound edged up higher on the announcement of PM's Keir Starmer resignation and the prospect of an orderly leadership transition.
Friday's session was volatile, after Iran postponed further peace negotiations with the US until Israel stopped striking Lebanon. The ceasefire between the countries was reached later in the session, which triggered a positive reaction that was almost immediately reversed. US markets were closed due to Juneteenth holiday.
As no relevant news came from the conflict in the Middle East, yesterday's session still had volatile energy markets but no major drivers. Brent crude prices closed nearly flat at USD 80/bbl, while TTF natural gas prices continued to ease, closing the session just above EUR 40/MWh. Volatility decreased after Wednesday's sharp increase following the Fed's meeting.
The Fed decided to keep rates steady in its first meeting with Kevin Warsh as chair, opening the possibility of future rate hikes later this year. Investor mood soured on the hawkish bias, with US treasury yields rising significantly, especially in the short term, after retail sales numbers in May showed a stronger-than-expected economy.
