Equity markets have started the week in a very enthusiastic manner amid optimism that U.S. legislators are on the brink of passing the tax reform.
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Financial markets were relatively quiet in the first session of the week as investors await for the several central bank decisions and communications expected for this week (most notably Fed, Bank of England and Bank of Japan).
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.
International stock markets were mixed with stronger declines in Europe and slighter decreases in the U.S., suggesting investors consider the effect of the tax reform is sufficiently priced in.
Investors welcomed Fed Chairman Jerome Powell comments saying that the Federal Reserve is monitoring the possible implications of trade tensions and that it "will act as appropriate to sustain the expansion".
In yesterday's session, investors traded with an optimistic mood as negotiations between Democrats and Republicans to raise the US debt ceiling seemed to advance fast. Accordingly, House speaker (McCarthy) and Senate Majority Leader (Schumer) are already preparing the vote count for a bipartisan deal to avoid reaching the debt ceiling.
Stock markets advanced in the U.S. and experienced a generalized decline in Europe, while sovereign yields picked up both in the U.S. and the Euro Area.
In yesterday's session, investors focused on brexit news, the release of the last Fed meeting minutes and trade tensions between the U.S. and China.
Stock indices in advanced economies tumbled as the Donald Trump administration put the Chinese telecom Huawei in the blacklist that could forbid it from doing business with U.S. companies.
Stocks fell across the board in the last session of the week.
Global stock markets extended the losses as investors digested the turn in trade negotiations between the U.S. and China.
Investors started the week trading with a more cautious approach, with sentiment negatively impacted by weak industrial data in Germany (–3.4% m/m in March, well below expectations) and signs of tightening credit conditions in the US, according to the Fed’s Senior Loan Officer Opinion Survey.
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.
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.
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.
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.
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.
Global stocks strengthened and core sovereign yields advanced on the back of improving sentiment indicators in the U.S. and China's manufacturing sectors.
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.
In yesterday's session, financial markets operated in a risk-off scenario, partly fueled in Europe by the European Commission's response to the Italian budget, which hints the possibility of a rejection from Brussels.