Evolution of the international financial markets and evaluation of the main events and economic indicators of the previous day session. Available in English.
11 May 2021
In the first session of the week, investors traded in a cautious mood amid an increase in market-based measures of inflation expectations (the U.S.' 5Y5Y inflation breakeven rate reached 2.36%, a level not seen since 2014).
Global stocks tumbled on Tuesday, with the tech sector in Europe suffering its biggest drop since October, mirroring a selloff on the Nasdaq (-1.9%, sharpest fall since March). The decline was driven by comments from U.S. Treasury Secretary Janet Yellen warning that interest rates may need to rise to prevent the economy from overheating.
Volatility edged up amid a bunch of economic releases on Friday. In the euro area, GDP contracted moderately in Q1 (-0.6% qoq) while inflation rose to 1.6% in April (+0.3pp) due to base effects in energy prices. U.S. consumer spending rose +4.2% mom in March as consumers received stimulus checks, and PCE core inflation advanced to 1.8% yoy.
Markets went through a mixed session as investors digested solid U.S. activity figures. U.S. GDP growth accelerated to +1.6% qoq in Q1 2021 (Q4 2020: +1.1%) on the back of stronger private consumption (+2.6% qoq), which found support on easing restrictions and fiscal stimulus. U.S. stocks advanced and yields on Treasuries nudged up.
Markets ended yesterday's session with no major movements. Risk assets gained, with commodity prices and most stock markets advancing moderately, but U.S. equities nudged down as investors eyed Biden's presentation of the $1.8trn American Families Plan – to be financed with higher taxes on the wealthy.
Investors traded in a more cautious way in yesterday's session. U.S. and euro area sovereign yields nudged up on the back of a surge in U.S. consumer confidence (the Conference Board's index rose to 121.7 points in April, its highest level since February 2020), while global stock markets were mixed.
Markets started the week on a positive note as investors eyed a heavy economic calendar in the days ahead. This morning the Bank of Japan left monetary policy unchanged, and today the Fed starts its two-day meeting. Corporate earnings reports and the release of GDP and inflation figures will also be under the spotlight in the next few sessions.
Investors ended the week in a mixed mood as they weighed increasing coronavirus cases, vaccination progress and plans for higher taxes. On Friday, global stocks were mixed, the USD weakened, and sovereign yields nudged up. Italy's peripheral spread widened modestly ahead of S&P's rating review (unchanged at BBB and a 'stable' outlook).
Yesterday investors focused their attention on the ECB meeting, which delivered no surprises, and on a report that suggested that Joe Biden's Administration would increase the capital gains rate to finance social spending. In the US, this latter driver increased volatility in stock markets and the main indices declined.