Evolution of the international financial markets and evaluation of the main events and economic indicators of the previous day session. Available in English.
Monday's session exhibited a risk-off tone after U.S. President Trump rejected Iran's proposal to reopen the Strait of Hormuz. Brent oil and TTF gas closed higher, and stocks declined across the board, with U.S. equities underperforming Europe (the former was dragged down by its IT overweight, while the latter was cushioned by its energy-heavy composition).
Markets ended the week on a constructive tone, with news of diplomatic negotiations in the U.S.-Iran conflict driving oil and gas prices lower and feeding into risk-on sentiment. Stocks rallied on both sides of the Atlantic, led by gains in the technology, financial, and consumer sectors. Early this morning, however, the pattern reversed.
Markets were mixed on Thursday, after a combination of higher energy prices following Saudi Arabia's interception of Houthi ballistic missiles targeting its energy infrastructure and a raft of hawkish comments from ECB and Fed officials (with ECB's Schnabel pointing to spreading price pressures) pushed up inflation expectations and policy rate odds.
Wednesday saw a risk-off session in financial markets, as stronger-than-expected September PMIs, hawkish ECB and Fed comments, and higher Brent prices prompted an upward repricing of inflation expectations and policy rates, with markets pricing more than four ECB hikes and almost four Fed hikes over the next 12 months.
Financial markets had a mixed session on Tuesday. Brent prices declined after Saudi Arabia moved to restart its East-West pipeline, while Trump reported some diplomatic progress with Iranian representatives.
Financial markets started the week on a positive note, as hopes of a diplomatic resolution to the war in Iran caused energy prices to fall, pushing inflation expectations lower on both sides of the Atlantic. This also eased central banks' rate hike expectations, although investors still price in three rate hikes by both the ECB and the Fed over the next 12 months.
Markets closed the week on a mixed note on Friday. Market odds for further interest rate hikes rose, with investors discounting three hikes for the Fed and three to four for the ECB over the next 12 months. The ECB's Lagarde and Vujcic pushed back somewhat against these market expectations, explaining that the bank will look beyond higher energy prices alone when deciding its monetary policy.
Thursday's session carried a broadly constructive tone. Equities rallied across most advanced and emerging economies, with the technology sector as a standout performer. In commodity markets, crude oil retreated for a second consecutive session (amid reports that China is asking Iran to rein in Houthi attacks). TTF natural gas also declined.
Wednesday's session delivered a broadly constructive tone, with European equities outperforming their U.S. counterparts in a session dominated by the Fed's rate hike. European indices closed higher across the board while U.S. markets were more mixed, with the S&P 500 eking out modest gains for most of the session before closing lower after the Fed's meeting.
The risk-off tone continued into Tuesday's session. Oil surged and extended September's run, driven by supply concerns and the disruption of Saudi Arabia's exports via the Red Sea port of Yanbu. Compounding the pressure, markets moved to a near-certainty on a Fed rate hike today.
Markets started the week in a distinctly risk-off mood, shaped by a combination of surging energy prices, AI sector uneasiness, and strong market expectations for a Fed rate hike ahead of Wednesday's policy decision. Equities fell broadly, with European indices underperforming their U.S. counterparts.
Markets pared risk aversion in the final session of the week. While August U.S. inflation figures reinforced market-implied odds of a Fed rate hike as soon as this week (to 88% from 72% on Thursday), stock markets closed higher across Europe and the U.S. as oil and gas retreated from their weekly highs.