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Financial markets recorded yesterday another session dominated by risk-off sentiment, fueled by uncertainty around geopolitical tensions involving Ukraine, hawkish comments by central bank officials and disappointing labour market data in the US (new jobless claims rose to 248.000 for the week ending Feb 12).

In yesterday’s session, the spotlight remained at the Russia-Ukraine conflict after Ukraine declared the state of emergency. Early this morning, Russia attacked some targets across Ukraine after Vladimir Putin ordered strikes.

In the last session of the week, investors traded with a risk-off mood and increased their demand for safe-haven assets.

Financial markets started the week with a risk-off session, as traders digested another round of inconclusive peace talks between Russia and Ukraine as well as new hawkish signals from the Federal Reserve.

In the last session of Q1, investors traded with a pessimistic tone amid rising inflationary concerns and mixed signals coming from the war in Ukraine. In addition, economic sentiment data in China worsened (manufacturing and services PMI declined in March below the 50 threshold).

Another session dominated by risk aversion, as investors continued to digest the hawkish rhetoric from central banks in major advanced economies and mixed signals from the ongoing conflict in Ukraine.

Investors started the week trading with a risk-off sentiment, still digesting the hawkish comments from the US Federal Reserve and ahead for March’s US CPI inflation data, to be released today.

Investors started the week with no clear direction, as traders digested mixed signals from the GDP data in China and corporate results in the US. Financial markets were closed across Europe, Australia and Hong Kong.

Financial markets started the week with mixed results, as investors weighted out positive corporate earnings results with downward revisions in the growth economic outlook and a new round of hawkish commentary by some Fed officials (Charles Evans from the Chicago Fed and James Bullard from St. Louis).

Volatility continued to rein in financial markets on Wednesday, as investors took on board hawkish comments from central bank officials and the decision by the Chinese authorities to keep the benchmark lending rates unchanged.

In yesterday's session, investors traded with an optimistic tone amid better-than-expected corporate results and despite the contraction of the US GDP in Q1 (-1.4% QoQ SAAR from 6.9% in Q4), which was affected by the change in inventories and a drag from net exports, while domestic demand remained strong. 

Investors traded with a risk-off mood in yesterday's session, fueling the demand for safe-haven assets. The main concern continues to be whether central banks will be able to tackle down inflation without triggering a recession.

Investors' sentiment improved at the end of the week amid comments from Federal Reserve president Jerome Powell signaling that 75 basis points increases are, for now, off the table.

Investors traded with a risk-on mood on Monday after Joe Biden signalled he would reconsider tariffs imposed to China by the Trump administration and Christine Lagarde offered a clear guidance on the next steps for the ECB.

Inflation and monetary policy continued to center financial markets’ stage in yesterday’s session. Euro area HICP surprised again to the upside and reinforced the views of those in the ECB Governing Council pushing for a 50bp interest rate hike in July.

Monetary policy and recession fears centered, again, the stage in financial markets. While investors focused on risks of an upcoming recession in the US, central banks continued tightening their monetary policy stance.

Risk aversion returned to the fore during a volatile session on Wednesday, as concerns about the health of the global economy, high inflation and monetary policy tightening resurfaced amid hawkish comments by central bank officials.

In the last session of the week, investors' sentiment improved amid optimistic comments by central banks' officials and a revision in US inflation expectations data by the University of Michigan.

Investors continued to trade with caution amid comments from central bank officials which reinforced their intention to tame elevated inflation. In particular, Fed President Powell said in a panel discussion with ECB and BoE presidents that the objective is to bring down inflation, even if this process could put economic growth at risk.

Fears of an economic recession with persistent inflationary pressures continued to weight on investors’ sentiment on Friday, following somewhat feeble economic survey data in the US (the ISM manufacturing slowed down from 56.1 to 53.0 in June) and another increase in eurozone HICP inflation (from 8.1% y/y to 8.6% y/y in June).