Evolution of the international financial markets and evaluation of the main events and economic indicators of the previous day session. Available in English.
In yesterday’s session, the focus was still on monetary policy decisions, as the ECB decided to raise the official interest rates by 25 bp (depo and refi rate at 3.25% and 3.75%, respectively). Despite lowering the pace of rate increases, Lagarde clearly signaled that the ECB cannot pause rate hikes yet as inflation is still too much elevated.
Yesterday’s Federal Reserve meeting resulted as a nonevent for financial markets as the 25bp rate increase to the 5.00%-5.25% target range was 100% priced in. Also, the removal of an explicit reference in the press release of further interest rate increases in the coming meetings was consistent with the expectation of a pause in the hiking cycle.
In yesterday's session, investors traded with a risk-off mood amid concerns on the US debt ceiling and clearer signs that the US labor market is cooling down. In particular, job vacancies in March declined by 400k to 9,590k, the lowest level since April 2021.
In yesterday’s session, investors reacted to the acquisition of First Republic Bank by JP Morgan, after the US government asked the biggest US bank to do so, according to the press note released by the bank. European financial markets were closed because of the May 1st holiday. Trading happened only in the US, Japan, and some emerging economies.
A more risk-on session was recorded across global markets on Thursday, as investors balanced out positive signals from corporate earnings results in the tech sector with mixed US economic data.
Investors continued to err on the side of caution on Wednesday, taking position ahead of the release of the Q1 GDP flash estimates for the US today and across the eurozone tomorrow.
Risk aversion returned to the fore during a volatile session on Tuesday, with investors sentiment faltered by the release of weak consumer confidence data and mixed signals from the ongoing Q1 corporate earnings season.
Investors started the week trading with no clear direction, taking on board mixed signals from the ECB and looking ahead for a new batch of corporate results and the Q1 GDP data for the world’s largest economies later this week.
Investors ended the week sticking with a cautious approach, taking on board mixed corporate earnings and resilient economic sentiment data pointing to more monetary policy tightening ahead. For the ECB, VP Luis de Guindos said core inflation remains “very sticky”and added that the next ECB moves will be based on data.
Investors traded with caution in yesterday’s session, amid mixed economic data releases and hawkish central banks’ communication. In particular, the minutes of the last ECB meeting showed how Governing Council members agreed to further tighten monetary policy if the inflation outlook in March’s projections is confirmed.
In yesterday’s session investors traded cautiously amid mixed corporate profits reports and lingering worries of persistent inflationary pressures, after the upside surprise in the CPI March data in the UK. Also, the US Beige Book released yesterday stated that the US economy stalled in recent weeks, with slowing hiring and inflation.
Caution continued to set the tone in financial markets amid mixed corporate profits releases and hawkish comments by US Federal Reserve members. In particular, Raphael Bostic argued in favor of a rate hike in May’s meeting, and pausing there, while James Bullard leaned towards bringing interest rates towards the 5.50-5.75% target range.