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Investors traded with cautious optimism at the last session of the week, taking on board a new round of hawkish comments from Fed officials, weak survey data (e. g. the monthly fall in the IFO business climate in March) and the EU-US plan to cut reliance on Russian natural gas. The Ukraine-Russia war has now extended for over 1 month.

Financial markets started the week with cautious optimism, with investors looking ahead for the release of the minutes of the March meetings later this week by the Fed and the ECB. Talks between Russia and Ukraine are due to continue, while western governments called for new sanctions against Russia, prompting a new rise in oil prices.

In yesterday's session, inflationary concerns continued to be the main driver for investors. While markets initially received positively the March IPC for the US (8.5% y/y for the headline and 6.5% for the core), the pickup in oil prices and hawkish comments by some Fed officials led to a worsening of investor's sentiment.

In the last session of the week, better-than-expected PMI data failed to boost sentiment, as investors remained focused on feeble corporate results and on the hawkish shift from central banks. On Sunday, Emmanuel Macron won the second round of the French Presidential elections with 58.6% of the votes.

Investors started the week trading with a risk-off mood following the announcement of lockdowns in several parts of Beijing. In this context, stock indices declined in the euro area and in emerging economies while late trading in the US, boosted by dip buyers, led the S&P 500 and the Nasdaq to advance.

Volatility continued to dominate across financial markets in yesterday's session, with the key drivers being mixed earnings reports, the expectation of a tighter monetary policy from the Fed and the ECB, uncertainty surrounding the economic effects of the war in Ukraine and lockdowns in China.

On Friday, investors digested key economic data releases in the euro area: GDP growth in Q1 decelerated from 0.3% to 0.2% and inflation ticked up from 7.4% in March to 7.5% in April. Nevertheless, the focus of the inflation figures was on the core index, which rose from 2.9% to 3.5% in a sign that inflation is rising across all the components.

Investors traded with an optimistic mood as the minutes of the FOMC last meeting showed a wide consensus among its members on the following steps on the interest rate path. Most participants think that further 50bp interest rate hikes in the coming two meetings (June and July) would be appropriate.

Investors traded cautiously on Wednesday, amid persisting worries about high inflation and slowing economic growth, and ahead of the crucial ECB meeting today. We expect the ECB to confirm the end of net asset purchases in early July and to signal the start of a hiking cycle in the policy rates thereafter.

Financial markets started the week with another sell-off session in which traders increased their demand for safe-haven assets. The higher-than-expected US inflation reading is still weighing on sentiment and investors raised their bets for a 75bp interest rate hike from the US Federal Reserve this Wednesday.

In the last session of the week, the stronger-than-expected US labor market indicators for June eased investors' recession fears. Non-farm payrolls increased by 372k (from 384k in May), the unemployment rate stood at 3.6% and wages rose by 5.1% y/y, which all together fuels the Fed's intention to raise rates by 75bp at its next meeting.

In the first session of the week, investors searched for catalysts as they positioned ahead of a key CPI data in the US on Wednesday and the start of the earnings season.

Financial markets recorded yet another session with high volatility, with the key drivers remaining the direction of monetary policy, the escalation in tensions with Russia and the strength of the USD.

In the first session of the week, investors traded with optimism, after the worse-than-expected US ISM data for September let traders to think the Fed could pursue a less aggressive monetary policy stance than previously expected. Nevertheless, NY Fed President John Williams said that there is still job to do to curb inflation.

In yesterday's session, investors maintained their appetite for riskier assets, after a drop in the number of job vacancies in the US fueled expectations of a monetary policy pivot from the Fed. In this direction, the central bank of Australia decided to hike rates by 25bp, slowing down the pace of its tightening.

Monetary policy tightening centered the stage again, with several US Federal Reserve members arguing that interest rates needed to be hiked further and that there were no clear signs of inflation having peaked yet. In the euro area, the accounts of the last ECB meeting revealed a broad-based concern of GC members about current inflation figures.

Another day of rollercoaster swings across financial markets, following the negative surprise in the inflation report in the US and the upside revisions in investors’ expectations of the pace of monetary policy tightening.

On Friday, the survey of the University of Michigan showed an increase in inflation expectations for the US, which led to a rise in sovereign yields and sharp losses on US stock indices. Meanwhile, in Europe, equities managed to register moderate advances. The US dollar strengthened against most currencies and the euro fluctuated below $0.98.

Financial markets started the week with a risk-on session, fueled by the resolution of the political crisis in the UK and hopes that the softening in sentiment data could allow central banks to slow the pace of monetary tightening.

Investors continued to trade with a risk-on mood, fueled by expectations that the Fed and the ECB could decide to reduce the pace of monetary tightening from December, which for the US were reinforced by the release of weak housing data. Investors were also taking position ahead of a crucial monetary policy decision by the ECB today.