On Friday, the release of HICP inflation data in the euro area centered the stage in financial markets. Headline inflation fell sharply from 8.5% to 6.9% y/y in March, but core inflation ticked up to 7.5% in a sign that price pressures are persisting. In this context, ECB member Villeroy de Galhau said there are still some more rate hikes to do.
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La crisis actual está desencadenando cambios en numerosos aspectos de nuestras vidas, muchos de ellos relacionados con nuestras preferencias residenciales. Por ejemplo, el teletrabajo puede llegar a transformar cómo y dónde vivimos. La pandemia también ha supuesto un impulso a la digitalización del sector inmobiliario y podría acelerar ciertas transformaciones en otros ámbitos como la rehabilitación de vivienda, lo que apoyaría la transición hacia una economía más sostenible.
Markets suffered a risk-off session amid concerns over the debt ceiling in the U.S. Volatility jumped and stocks were lower across advanced and emerging economies as Republicans blocked a Democratic move to raise the debt limit. U.S. Treasury Secretary Janet Yellen warned that her department will run out of cash around October 18.
Investors ended the week on a positive note and stocks rose across the board boosted by optimism over trade talks between the U.S. and China.
Escalating trade tensions between the US and China worsened investor sentiment and motivated safe-haven flows in the last session of the week.
In yesterday's session, monetary policy took center stage again as US Federal Reserve comments pointed to a higher terminal interest rate than anticipated by financial markets. Investors priced in these comments and yields on sovereign bonds rose in the euro area and, especially, in the US.
Global stocks strengthened and core sovereign yields advanced on the back of improving sentiment indicators in the U.S. and China's manufacturing sectors.
After a strong start of the week, financial markets steadied in yesterday's session. European stocks advanced moderately on the back of carmakers while U.S. stocks finished with small gains after being lower for most of the session.
The adoption by the US Senate of a fiscal 2018 budget resolution brought optimism about the chances for tax cuts and supported a small decrease in sovereign yields.
Financial markets started the week with caution as they await for more earnings releases, which will be a key driver of stock markets in the next sessions.
As financial markets were closed in most euro area countries, yesterday's focus was in the U.S., where the main equity indices ticked up in the lowest trading session since November.
Benoît Cœuré, member of the executive Board of the ECB, said yesterday in an interview that he is not favorable of tiering the central bank negative interest rates.
Stocks fell, the U.S. dollar appreciated against most currencies and U.S. and German sovereign yields ticked up as investors digested the outcome of Wednesday's Fed monetary policy meeting, which was in line with our expectation of no changes in monetary policy for the coming quarters.
Market participants remained relatively cautious as the publication of earnings reports will intensify in the coming days. U.S. stocks declined slightly while most of the European indices were up.
Investors turned more positive during a risk-on session on Tuesday. The key themes remained the potential moderation of interest rate hikes by central banks, COVID outbreaks in China and volatility in energy markets.
U.S. stock markets rebounded while in Europe the tone was mixed. In sovereign bond markets, 10-year yields nudged down in the U.S. and edged up in the Euro Area.
In U.S. markets, stocks advanced and sovereign yields declined for short-maturity treasuries (the U.S. sovereign curve steepened) as messages from the U.S. Federal Reserve made investors confident that the Fed will cut rates soon.
The resumption in trade negotiations between China and US boosted stock indices across the globe at the beginning of yesterday's session.
In the first session of the week, optimism regarding trade negotiations between the U.S. and China (as Donald Trump said that talks are "going very well") and higher-than-expected earnings of U.S. companies improved investor sentiment.
Ahead of today's key CPI data release in the US, which is expected to show a deceleration in inflation, investors traded cautiously. Yields on 10-year sovereign bonds edged modestly up in the euro area while increasing more notably in the US.