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Investors started the week in a cautious mood awaiting several key events: from Central bank meetings across many developed economies, to a raft of important economic data and companies' earnings. In the data front, today Q2 GDP figures will be released for the eurorozone aggregate and its main economies, as well as some inflation data for July.

Markets traded on a risk-off tone for a second session in a row after data showed the US labor market continues to cool, boosting expectations the Fed will cut interest rates at its next meeting. In particular, job openings in July (JOLTS) fell to the lowest level since 2021.

Risk-off mode took over financial markets on Friday, as the US employment report showed a cooling labour market. Hiring in the US is slowing down, but not falling off a cliff, so implicit interest money market rates are still discounting a 25 b.p. cut from the Fed at its September meeting.

Financial markets had a mixed session on Wednesday. As investors awaited today's ECB meeting, the biggest macro driver yesterday was the US CPI report for August, which showed that prices rose in line with expectations (0.2% MoM), but core inflation showed some stickiness (0.3% MoM) due to higher than expected costs for housing and other services.

Investors ended the week on a risk-on tone as monetary policy expectations drove sentiment during Friday's session. The likelihood of a 50 b.p. rate cut by the Fed this week rose to almost 50%.

China’s central bank triggered a risk-on mood in financial markets yesterday by introducing the largest stimulus package since the pandemic to support its faltering economy: it reduced reserve requirements for banks, cut a key repo rate, and lowered the mortgage rate for homeowners.

Thursday's markets saw a mixed session across asset classes and geographies. In the Eurozone, peripheral spreads fell for all countries except France as the poor fiscal outlook continued to weigh on the country's sovereign debt.

Financial markets started the week with subdued trading, as debt and money markets in the US were closed for a Federal holiday. Eurozone sovereign bond yields were fairly flat, with peripheral spreads narrowing slightly, as investors continued to focus on Thursday's ECB meeting, for which they expect a 25bp interest rate cut.

Revised inflation figures for Spain and France reaffirmed market expectations of a 25bp interest rate cut at this week's ECB meeting. And, while industrial production for the euro block rose in August and sentiment indicators improved in Germany, the data are unlikely to prevent the central bank from delivering a cut.

Investors traded cautiously ahead of the ECB's Governing Council meeting today, for which markets are expecting a 25 bp interest rate cut. Euro area sovereign bond yields fell for a second straight session and the main equity indices in the region were mixed.

Financial markets had a choppy session on Tuesday, with many assets and indices oscillating between gains and losses. Government bonds had a slightly volatile session, ending with higher yields in the eurozone and flat in the US, as traders grappled with a strong primary market supply and different scenarios for the upcoming US presidential election.

Investors traded without a clear direction during Friday’s session. Inflation expectations in the euro area fell to 2.4% and 2.1% for the 1-year and 3-year outlooks, respectively, and sentiment improved in both Germany and the US.

Investors ended the week in a slightly risk-on mood, as they did not to read too much into US employment data which showed a slowdown in job creation in October, disrupted by strikes in the aerospace industry and severe hurricanes.

Financial markets had a volatile session on Tuesday, driven by geopolitical headlines and with no major macro data releases. Eurozone government bond yields fell as several ECB officials speaking during the day supported a dovish ECB, notably Italy's Panetta, who said the ECB should focus on the sluggish economy and move rates to an expansionary stance.

Investors started the week in a risk-on mood, particularly in the US. US Treasury yields fell sharply on the news of Trump's pick for Treasury Secretary, Scott Bessent, a hedge fund manager seen by investors as fiscally sensible.

Investor risk appetite eased slightly yesterday as government bond yields weighed on equities. In the eurozone, sovereign yields rose, curves flattened and peripheral spreads narrowed. Data released yesterday showed downside surprises in German retail sales and factory orders, and negative sentiment across the EU from the December EC's confidence indicators.

Spain's real estate sector is entering a more mature phase of the cycle characterised by a slowdown in growth in demand and prices. The factors supporting the property market boom (job creation, favourable financial conditions and high foreign demand) are still enjoying a positive trend but have eased slightly.

Financial markets traded without a clear direction ahead of the US CPI report expected today. In the US, assets had a choppy trading session, as early optimism driven by unexpectedly low US wholesale inflation in December (PPI +0.2% mom vs. +0.4% expected) was muted later on. In this context, US sovereign bonds and equities closed the session flat.

With US markets closed for the Martin Luther King Jr. holiday, the rest of global markets traded cautiously ahead of Donald Trump's inauguration. Investors were especially attentive to announcements regarding trade policy, but a memo suggesting he would not impose new tariffs on day one (which he in fact, did not) kept markets at ease.

Investors kicked off the week on a cautious tone following President Trump's tariff threats over the weekend, which he said would include a 25% tariff on aluminium and steel imports (eventually signed via executive order late last night) as well as a series of further reciprocal tariffs on all trading partners.