Evolution of the international financial markets and evaluation of the main events and economic indicators of the previous day session. Available in English.
Investors traded with caution in yesterday’s session, amid mixed economic data releases and hawkish central banks’ communication. In particular, the minutes of the last ECB meeting showed how Governing Council members agreed to further tighten monetary policy if the inflation outlook in March’s projections is confirmed.
In yesterday’s session investors traded cautiously amid mixed corporate profits reports and lingering worries of persistent inflationary pressures, after the upside surprise in the CPI March data in the UK. Also, the US Beige Book released yesterday stated that the US economy stalled in recent weeks, with slowing hiring and inflation.
Caution continued to set the tone in financial markets amid mixed corporate profits releases and hawkish comments by US Federal Reserve members. In particular, Raphael Bostic argued in favor of a rate hike in May’s meeting, and pausing there, while James Bullard leaned towards bringing interest rates towards the 5.50-5.75% target range.
In the first session of the week, investors traded cautiously amid hawkish comments from some FOMC member and mixed results in the US corporate earnings season. In particular, Richmond Fed President Thomas Barkin said that more evidence that US inflation is easing will be needed before changing the monetary policy stance.
Hawkish comments by officials from the ECB and the US Federal Reserve were the main drivers for investor sentiment in the last session of the week. In the euro area, Pierre Wunsch urged the ECB to speed up the reduction of its balance sheet and to stop reinvesting the maturing bonds while Joachim Nagel called for further interest rate hikes.
Risk appetite extended across financial markets on Thursday, with sentiment lifted by resilient economic data and further signs that inflationary pressures are easing. The focus today turns to the kickoff of the Q1 corporate earnings season, with results from some large US banks.
Investors continued to err on the side of caution on Wednesday, balancing out data showing US inflation cooled slightly more than expected in March with warnings set out in the minutes of the last Fed meeting of the risk of a mild recession in the US later this year.
A session with mixed results across markets on Tuesday, as investors returned from the Easter holiday and took position ahead of the March inflation report in the US today. The Fed also releases the account of its March meeting.
Investors started the week trading with a cautious approach, in a session characterized by low volumes due to Easter holidays (financial markets were closed in most European countries as well as in Australia and Hong Kong).
Economic data releases centered the stage on Tuesday, in particular the JOLTS survey, which showed job openings in the US fell to 9.9 million in February, down from 10.6 million vacancies in the previous month. This level, the lowest since May 2021, pushed down the vacancies for unemployed ratio from 1.9 to 1.7, still above historical average.
In yesterday's session, investors' concerns about the pace of economic activity in the coming months led to a generalized risk-off sentiment. In particular, the US manufacturing ISM declined from 47.7 to 46.3 while the prices paid subcomponent fell too (from 51.1 to 49.2).
On Friday, the release of HICP inflation data in the euro area centered the stage in financial markets. Headline inflation fell sharply from 8.5% to 6.9% y/y in March, but core inflation ticked up to 7.5% in a sign that price pressures are persisting. In this context, ECB member Villeroy de Galhau said there are still some more rate hikes to do.