Evolution of the international financial markets and evaluation of the main events and economic indicators of the previous day session. Available in English.
Renewed fears about inflation and fiscal discipline prompted a broad sovereign bond sell-off. The Japanese 20-year bond yield reached levels not seen since 1999, the 30-year UK yield touched highs from 1998, and the yields on the 30-year US Treasury came close to 5%. Risk-off sentiment spread to global stock markets which pared losses during the session.
Markets had a muted reaction to a U.S. federal appeals court which ruled 7–4 that tariffs imposed under the IEEPA exceed congressional authority, affecting general bilateral tariffs but not sector-specific ones. The tariffs remain in place until October 14 while parties may seek Supreme Court review.
Investors ended August with a mixed session as markets remained focused primarily on inflation data and monetary policy expectations.
The Federal Reserve held the federal funds rate at 4,25%-4,50%, citing solid labor market conditions and above-target inflation. Financial markets made a hawkish reading of the Fed's accompanying statement and pushed back expectations of the next cut from September to October. The probability of a second cut in December dropped from 80% to 40%.
Euro area investor sentiment recovered following the EU-US trade deal, sending stocks higher across the region. In the US, investors traded in a risk-off mood on news that, after two days of negotiations in Stockholm, Chinese and US officials failed to deliver a trade deal and agreed only to seek an extension of the 90-day tariff truce. Stocks fell, and Treasuries rallied.
Initial optimism over the EU-U.S. trade deal, which had boosted European stocks early in the trading session, soon faded and the region's main indices closed lower with losses led by German stocks (-1%). U.S. stocks had a choppy session and ended mostly flat, while large-cap tech stocks edged higher. The euro slipped to just below $1.16, its lowest in over a month
Markets ended the week with a mixed session. Optimism over trade deals continued to support U.S. equity markets, sending the S&P 500 and the Nasdaq to new record highs, while euro area stocks ended mostly lower as investors traded cautiously awaiting news of a trade deal. Sovereign yields were little changed after the ECB meeting and Trump's visit to the Fed.
The risk-on mood triggered by trade negotiations continued to support markets but lost some steam in yesterday's session. Sovereign yields rose on the back of a hawkish reading of the ECB's meeting, while euro area and U.S. stocks posted moderate gains with a mixed sectorial performance (European banks rallied on favorable earnings and higher rates).
The announcement of a U.S. - Japan trade deal and hopes of a deal between the EU and the U.S. unleashed investors' risk-on sentiment in yesterday's session. Global stock markets rallied and sovereign yields declined across the board. Safe-haven assets (such as gold and the CHF) retreated while the EUR strengthened towards $1.18.
Markets had a mixed session yesterday. Sovereign yields continued to decline across the U.S. and euro area, while the EUR crawled back above $1.17 and touched a 10-day high. European stock markets were mixed while the U.S.' S&P 500 wavered. This morning Japan's Nikkei rallied on the back of a U.S.-Japan trade deal that would set tariffs on Japan at 15% (incl. cars).
Investors traded with caution in the first session of the week. Looming trade negotiation deadlines and the EU's possible retaliatory measures triggered safe-haven flows and a rally in global bonds, with sharp declines in 10-year euro area sovereign yields and narrower peripheral spreads. Gold rose and the EUR strengthened towards $1.17.
Markets ended the week in a cautious mood. Stocks were mixed, with European indices suffering moderate losses while the S&P 500 ended largely unchanged after having dipped earlier in the session. The earnings season kicked off with mostly solid results. Bitcoin closed "Crypto week" little changed (Trump signed the GENIUS Act on Friday).