Financial Markets Daily Report21 May 2026
Yesterday's session had a risk-on tone, after US President Trump made comments referring to the deal talks with Iran as being in their final stages. Crude oil prices fell, with the barrel of Brent dropping by more than 5% to settle at USD 105/barrel, while TTF also went down by a similar magnitude (closing at EUR 49/MWh) and volatility fell.
Sovereign euro area yields fell by more than 10 b.p., slightly narrowing peripheral spreads, while US Treasury yields also fell, flattening the curve. Markets still price one rate hike from the Fed before the end of the year, and three rate hikes from the ECB in the same period, the first one being in the next meeting in June.
US equity indices closed the session with gains after three consecutive sessions of losses, while in the euro area stocks hiked too, lead by the Spanish IBEX-35. Moves in the currency market were comparatively subdued, with the dollar slightly depreciating against peers and leaving the EUR/USD cross just above 1.16.