Financial Markets Daily Report

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In yesterday's session, investors traded cautiously ahead of today's U.S. CPI data for May (Bloomberg consensus expects +4.7% yoy) and the ECB monetary policy meeting (the focus will be on the updated macro projections and on the pace of net asset purchases under the PEPP, which will probably remain unchanged at 80bn per month).

In yesterday's session investors traded cautiously following the release of better-than-expected Q1 GDP growth data for the euro area (revised up by 0.3 p.p. to -0,3%) and record high job opening figures for the U.S. (up by almost 1 million to 9.3 million in April).

In the first session of the week, investors extended the positive tone seen during last Friday. In the euro area, economic data releases came in better than expected (EZ Sentix Investor Confidence rose in June to 28.0 from 21.0 and Spain's industrial production rose by 1.2% mom in April).

In the last session of the week, investors traded with a positive mood amid robust employment data in the U.S. Non-farm payrolls rose by +559k in May (consensus expected +675k on average) and the unemployment rate dropped by 0.3 p. p. to 5.8%.

The ADP National Employment Report showed private payrolls increased by 978,000 jobs, the biggest increase since June last year. Additional figures of the services sector showed signs of economic improvement. On the other hand, President Joe Biden may be open to hike the corporate tax rate below 28%.

Wall Street's main indexes closed little changed as investors weighed inflation concerns and a fresh surge in so-called "meme stocks" : AMC jumped 97.44%. European equities closed at another record high amid hopes of a strong economic rebound that boosted cyclical stocks.

Wall Street's main indexes ended little changed, with gains in energy and financial shares countering declines in healthcare.

European equities dropped as investors looked for the next catalysts to give the market direction. In Spain, shares of utility companies dropped over a draft bill the government is preparing that could drive down electricity prices.

In the last session of the week, global stocks remained near record highs lifted by the ongoing economic recovery from the pandemic and injections of fiscal and monetary policy stimulus.

Financial markets recorded another day with positive results, following the release of solid economic data in the U.S.: new jobless weekly claims fell to a new pandemic-era low and core capital goods orders rose by 2.3% in April, in both cases above expectations. U.S. Treasury Secretary Yellen also reiterated that the rise in inflation should be transitory.

Investors continued to trade with a risk-on mood on Wednesday, easing worries about rising inflation and shrugging off hawkish signals sent by some Fed officials throughout the week, including Fed Vice Chair for supervision Randal Quarles. Equity markets rose modestly, led by tech stocks, while volatility receded.

During a volatile session, markets erased some of the early gains after comments by Fed VP Richard Clarida noting that the central bank could start discussing in upcoming meetings adjusting the pace of asset purchases (tapering). In addition, house prices in the U.S. continued to accelerate while consumer confidence stalled.