Financial Markets Daily Report
22 July 2021

Yesterday investors paused their concerns on the evolution of the pandemic and traded with an optimistic mood amid better-than-expected corporate results. Since the start of the earnings season, more than 85% of the S&P 500 companies that have released results have beaten analysts’ expectations.

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  • Yesterday investors paused their concerns on the evolution of the pandemic and traded with an optimistic mood amid better-than-expected corporate results. Since the start of the earnings season, more than 85% of the S&P 500 companies that have released results have beaten analysts’ expectations.
  • In this context, stock indices advanced robustly across the board with financial, travel and energy sectors leading the gains. In fixed-income markets, yields on 10-year sovereign bonds edged modestly up in the euro area and rose by 7bp in the US. Elsewhere, the US dollar weakened against most currencies and the barrel of Brent rose above $72.
  • Today the focus will be on the ECB Governing Council meeting, which is expected to adjust the forward guidance on interest rates to the new strategy (inflation target symmetric at 2% and tolerating a period of inflation fluctuating moderately above 2%). No change in net asset purchases is expected (80 and 20bn per month under PEPP and APP).
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