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Friday's session was driven by optimism, especially in the euro area, where Thursday evening geopolitical headlines (Trump cancelled the strikes that were planned on Iran and declared being close to a peace agreement) were put in price. This deal has been reached during the weekend, it will be signed on Friday and will imply the reopening of Strait of Hormuz.

Markets remained on a risk-on mode on Tuesday, with expectations of an imminent reopening of the Strait of Hormuz. Brent crude prices dropped 5% for the second consecutive session, settling at $79/bbl, a minimum since early March. TTF natural gas fell by nearly 2%, closing the session just below EUR 42/MWh, while the EUR/USD remained stable around 1,16.

The Fed decided to keep rates steady in its first meeting with Kevin Warsh as chair, opening the possibility of future rate hikes later this year. Investor mood soured on the hawkish bias, with US treasury yields rising significantly, especially in the short term, after retail sales numbers in May showed a stronger-than-expected economy.

As no relevant news came from the conflict in the Middle East, yesterday's session still had volatile energy markets but no major drivers. Brent crude prices closed nearly flat at USD 80/bbl, while TTF natural gas prices continued to ease, closing the session just above EUR 40/MWh. Volatility decreased after Wednesday's sharp increase following the Fed's meeting.

Risk appetite improved on Tuesday after US inflation surprised to the downside in June. The CPI print was driven by falling energy prioces but also softer core services, particularly shelter, overshadowing Warsh’s hawkish remarks in Congress, where he said he has "no tolerance for persistently elevated inflation". Interest rate expectations for the Fed declined, with markets now pricing a second hike over the next 12 months with a 70% probability.

Market sentiment remained downbeat due to persistent geopolitical tensions in the Middle East and continued weakness in AI-related market segments. In commodities, energy prices lacked clear direction, with Brent edging lower and TTF prices rising. The dollar strengthened modestly against the euro, on expectations of a resilient U.S. economy.

Markets ended the week on a cautious note, driven by a deterioration in investor sentiment towards the Middle East conflict and a selloff in tech stocks. Brent oil prices rose nearly 5% to close above $88 per barrel, and TTF gas surged towards €60 as the U.S. and Iran stepped up attacks across the Gulf.

Renewed U.S.-Iran strikes weighed on investor sentiment and led to a volatile session. Energy prices rose, with Brent oil and TTF gas around $90 and €70, respectively. Stock markets declined across the board and the USD weakened against a basket of major currencies, with the euro strengthening moderately above $1.16.

Wednesday's session had a more mixed tone compared to Tuesday's broad selloff, with U.S. equities staging a partial recovery. European equities, however, remained under pressure, weighed down by higher sovereign yields. In FX markets, the yen strengthened against the dollar amid hawkish BoJ speak, while the euro remained roughly stable.

Markets pared risk aversion in the final session of the week. While August U.S. inflation figures reinforced market-implied odds of a Fed rate hike as soon as this week (to 88% from 72% on Thursday), stock markets closed higher across Europe and the U.S. as oil and gas retreated from their weekly highs.

The risk-off tone continued into Tuesday's session. Oil surged and extended September's run, driven by supply concerns and the disruption of Saudi Arabia's exports via the Red Sea port of Yanbu. Compounding the pressure, markets moved to a near-certainty on a Fed rate hike today.

Monday's session exhibited a risk-off tone after U.S. President Trump rejected Iran's proposal to reopen the Strait of Hormuz. Brent oil and TTF gas closed higher, and stocks declined across the board, with U.S. equities underperforming Europe (the former was dragged down by its IT overweight, while the latter was cushioned by its energy-heavy composition).

Investors traded cautiously in Tuesday's session. Equities posted losses across the U.S. and Europe, and sovereign yields were volatile even as energy prices declined. The U.S. 30-year Treasury yield surged to levels not seen since the early 2000s, despite finding a partial reprieve after NY Fed President John Williams signaled no urgency to deliver the next rate hike.

Financial markets started the week in a cautious tone. Tensions in euro area sovereign bond markets remained in focus, even though the French spread narrowed, as peripherals were flat. Sovereign curves steepened on both sides of the Atlantic as short-term references fell, while long-term ones rose. The euro weakened against its main peers.

French bond stress deepens The French spread reached 153bps, its widest since early October, as France's fiscal and political pressures continued to weigh on sovereign debt. The euro weakened as the French spread widened, with ECB Governing Council member Rehn acknowledging the spread had moved "somewhat”.

Sovereign bond markets remained under pressure as investors grappled with persistent inflation risks, higher energy prices and uncertainty surrounding the AI-driven growth story. US Treasury yields stayed elevated while in Europe peripheral spreads widened further amid fiscal concerns, with French yields hitting the 5% threshold for the first time since 2002, while UK gilt yields rose after stronger-than-expected inflation data.

Equities rallied on both sides of the Atlantic on Monday, as investors looked ahead to earnings releases from major technology companies and Spanish banks later this week. Oil prices remained broadly stable, while Dutch TTF natural gas gained 3% to 96.7 €/MWh, reaching its highest level since the outbreak of the conflict in the Middle East.

Markets ended the week on a risk-off note. Stocks tumbled, led by a selloff in technology equities, while oil and gas prices jumped amid investor concerns about a potential escalation of the Middle East conflict. U.S. and German sovereign yields nudged down, driven by safe-haven flows, while euro area peripheral spreads widened, and the USD and the EUR weakened.

Stock markets posted gains across Europe and the US, while sovereign yields moved in opposite directions as they recorded mild declines in the eurozone and moderate increases in the US.

Stock markets were mixed in yesterday's session, with further gains in the U.S. and small declines in the Euro Area. In fixed-income markets, sovereign yields were stable ahead of the central bank policy meetings later this week.