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Geopolitical tensions in the Middle East persist, although yesterday brought some relative calm after the sharp volatility seen earlier in the week. Brent crude traded in a $80–85/barrel range before settling near $81, after President Trump said the US would protect shipping routes in the region. European natural gas prices fell back below €50/MWh. Equity markets continued to slide in Asia but recovered in the US and Europe, while the dollar stabilized around 1.16 against the euro.

Yesterday's session was marked by news that the US and Iran were resuming the strikes as the interim deal between the two countries to end the war was over. Energy prices peaked near European closing, with Brent crude reaching USD 80/barrel to further ease and close the session at USD 78. TTF closed the session up 5% at EUR 49/MWh.

Markets closed the week on a mixed note on Friday. Market odds for further interest rate hikes rose, with investors discounting three hikes for the Fed and three to four for the ECB over the next 12 months. The ECB's Lagarde and Vujcic pushed back somewhat against these market expectations, explaining that the bank will look beyond higher energy prices alone when deciding its monetary policy.

The first few months of 2019 seem to confirm the positive tone of the sector in Spain, consolidating the excellent inbound tourism figures of recent years. While growth in the number of tourists visiting Spain is slowing down, their expenditure is still increasing significantly. The challenge is how to sustain these trends, redirecting tourism supply towards higher quality segments.

In the last session of the week, the mood was disparate in both sides of the Atlantic. In Europe, losses in the main stock markets were moderate and broad-based, while in the U.S., the S&P 500 bounced back from the losses registered on previous days.

In the last session of the week, financial markets echoed the agreement reached by the U.S. and China in the phase-one trade deal and the results of the general election in the UK.

In the first session of the week, investors traded in a lower volatility environment and weighed, on the one hand, the increase in covid-19 cases around the globe and, on the other, the possibility of additional government stimulus. 

Investors traded on a cautious note in the last session of the week. Amid lower risk appetite, volatility rose, stocks declined across the board (particularly so in the U.S.), safe-haven currencies (such as the JPY and the USD) strengthened and commodity prices fell (the barrel of Brent dipped below $40).

Investors traded with a risk-on mood at the start of the week, reversing some of the losses of the previous sessions. In the U.S., tech stocks led the equity markets rebound, following comments by Fed officials, including governor Lael Brainard, reiterating that they see the spike in inflation as transitory.

In the last session of the week, financial markets generally assessed the long awaited speech of the Fed President in Jackson Hole as dovish. Jerome Powell affirmed the ongoing economic recovery, although he pointed to the evolution of the Delta variant as the main risk.

Spain's real estate sector has been slowing down throughout 2019 at a brisker rate than expected, given the deterioration in the economic outlook. Nevertheless, the fundamental factors supporting housing demand are still solid and no excesses can be observed on the supply side. With a view to 2020, we expect the sector's trend to remain positive although the growth rate will be more moderate, both for prices and sales.

Financial markets started the week with one of their rockiest sessions since the 2008 crisis. The oil price war which had started over the weekend and fears over the economic impact of the coronavirus fuelled a sharp jump in risk aversion, leading to large losses in stock markets, sinking sovereign yields and a big widening in risk premia.

In the last session of the week investors traded cautiously amid doubts over the evolution of the pandemic in the US and as EU leaders ended their Friday meeting with no agreement on the EU recovery plan. 
 

Markets were volatile during yesterday's session, as US stocks reversed the losses of earlier in the day. The S&P 500 gained 0.1% on the day after being down 1.8% at one point earlier on Tuesday. The tech-heavy Nasdaq Composite was down 3.9% in early trading before reversing part of the losses and ending the day down just 0.5%.

In the last session of the week, investors traded cautiously as they continued to weigh accelerating economic growth and inflation expectations for the US. In this context, the S&P 500 ticked down, the Nasdaq rose and euro area indices declined following previous' day losses in the US.