Evolution of the international financial markets and evaluation of the main events and economic indicators of the previous day session. Available in English.
Tuesday's session opened September on a risk-off note. The re-escalation of U.S.-Iran tensions continued to fuel a rally in oil and gas prices, adding pressure to market-based inflation expectations and reinforcing market-implied probabilities of Fed and ECB rate hikes.
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.
Markets saw high commodity prices and elevated sovereign yields throughout August, driven by the ongoing conflict in the Middle East, pressure on inflation expectations, and hawkish central bank rhetoric. Yet stocks trended higher on the back of a solid earnings season, while the USD weakened against the main currencies.
Risk appetite improved on Thursday amid supportive macro data and lower energy prices, as war tensions around Hormuz did not escalate. Eurozone sovereign yields fell, with steeper curves and tighter peripheral spreads, after GDP growth surprised to the upside across the euro area and its main economies. ECB expectations were little changed ahead of today’s June CPI print, though markets pared odds of a third rate hike.
Thursday was dominated by a hawkish-hold FOMC, ongoing AI-capex concerns, and a sharp re-escalation of the US-Iran war.
Markets weighed lower geopolitical risk and falling energy prices against growing concerns over AI-capex returns. Brent oil fell to $84/barrel, lowering inflation expectations (especially in the short-term) and sovereign yields on both sides of the Atlantic.
Risk appetite surged on Monday as US strikes on Iran remained paused for a second consecutive night. Energy prices declined sharply, with Brent dropping below $90 per barrel. This lowered inflation expectations, with euro area 1Y inflation swaps falling by around 0.2 p.p. to 2.4%. Sovereign yields also declined across the board, particularly in the euro area.
Markets ended Friday with a cautious tone as lower energy prices supported sovereign bond yields amid resilient macroeconomic data. Yields declined on both sides of the Atlantic, more markedly in the euro area, with peripheral spreads tightening, as Brent crude retreated from $100/barrel.
Risk-off sentiment took over yesterday's session. Oil and gas surged amid escalating tensions in the Middle East (eg., the Houthis attacked two Saudi Arabian tankers in the Red Sea), sending global stocks lower and triggering higher sovereign yields across the board. In FX markets, the U.S. dollar index strengthened towards a one-month high.
Investor sentiment was mixed in yesterday's session. Energy prices crept up as the U.S. and Iran continued to exchange fire and Brent oil briefly topped $95. Stocks rose across Europe but the U.S. S&P 500 and Nasdaq closed lower amid a mixed performance of tech stocks and ahead of key Q2 earnings releases.
Global markets traded on a risk-on note in yesterday's session. Stocks rallied across advanced and emerging economies, supported by a recovery in semiconductor shares. The improvement in investor sentiment defied higher energy prices in commodity markets, as the price of Brent crude rose above $90 per barrel amid ongoing tensions in the Middle East.
Brent oil and TTF gas whipsawed and stock markets were mixed as hostilities in the Middle East continued to weigh on investor sentiment. Tech equities steadied after last week's rout, but both the S&P 500 and the Eurostoxx closed moderately lower.
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.
