Evolution of the international financial markets and evaluation of the main events and economic indicators of the previous day session. Available in English.
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”.
Risk sentiment weakened in Europe as persistent investor concerns over France’s fiscal outlook continued to weigh on equities, the euro and sovereign bonds. In contrast, U.S. equities advanced, led by gains in AI-related and semiconductor stocks.
Friday saw a mixed session across asset classes. Energy prices rose amid elevated geopolitical risks in Hormuz and Ukraine, keeping short-term inflation expectations under pressure, particularly in the US.
Thursday's session carried a cautious tone. Market concerns over the sustainability of AI investments weighed on chipmakers and technology equities, but the main U.S. stock market benchmarks ended higher while European indices were mixed. Brent oil and TTF natural gas prices nudged down.
Moderate risk-off sentiment prevailed across markets following the upside surprise in U.S. inflation, while oil prices remained elevated amid ongoing tensions in the Middle East. The CPI data came in slightly higher than expected, standing at 3.7% YoY, driven primarily by energy prices, particularly gasoline.
World stocks fell, led by chipmakers and concerns over AI spending. Wall Street closed lower (the Nasdaq 100 dragged by semiconductors) and Asian shares hit a two-month low before steadying as the selloff eased. In Europe, the STOXX 600 touched a one-week high on softer oil and yields. US big-bank earnings (JPMorgan, Goldman Sachs, Wells Fargo) kicked off to mixed reviews.
Geopolitical tensions in the Middle East remained at the center of investors’ attention on Monday. Oil prices moved higher following attacks on Saudi Arabia, offsetting earlier optimism around Russian diesel exports and a potential Russia-Ukraine energy ceasefire announced by Trump over the weekend. Brent crude rose 1.8% to USD 106.7/bbl.
Energy prices rose on Thursday amid reports of intensified Iranian attacks on tankers crossing Hormuz, before Trump ruled out new US attacks on Iran ahead of the midterms. Eurozone short-term inflation expectations rose, while ECB and Fed hike expectations remained stable, as officials struck a cautious, mildly hawkish tone and did not endorse an October move.
A broad risk-off move dominated Wednesday's session, with Brent crude remaining above $100/barrel amid reports of increased Iranian attacks on tankers crossing Hormuz. In the eurozone, concerns over France's fiscal situation deepened after comments from the Banque de France governor ruling out an ECB intervention.
Risk sentiment improved on Tuesday as Treasury yields retreated from multi-decade highs and energy-related inflation concerns continued to ease. Technology stocks led gains, with the S&P 500 hitting a fresh record while the Eurostoxx50 rose 0.5%.
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.
A soft US September jobs report, with payroll growth below expectations (29k vs 90k expected) but not weak enough to trigger growth concerns, alongside mixed Factory and Capital Goods orders data, prompted a modest upward reassessment of Fed rate expectations. Markets now price a hike in December and at least two more thereafter. Treasury yields rose.