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.
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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.
Global stock markets extended the losses as investors digested the turn in trade negotiations between the U.S. and China.
Stocks fell across the board in the last session of the week.
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.
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.
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".
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).
The resumption in trade negotiations between China and US boosted stock indices across the globe at the beginning of yesterday's session.
Investor sentiment improved in yesterday's session with the expectation of an extension of the accommodative monetary policy stance. Analysts expect Christine Lagarde to follow Mario Draghi's approach and provide monetary stimulus in the coming quarters.
Markets ended the week on a cautious note after a strong U.S. labor market report made investors hesitant about whether the Fed will cut rates in its July meeting.
Investors started the week on a prudent note as they reassessed expectations of a Fed rate cut in the light of recent strong U.S. labor market data.
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.
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.
Escalating trade tensions between the US and China worsened investor sentiment and motivated safe-haven flows in the last session of the week.
Financial markets buckled on Monday after China let its yuan weaken below 7 to the dollar, an 11 year low, adding to broad risk aversion on concerns about the escalation of the US – China trade tensions.
Stock markets rose mildly in most trading floors while yields on sovereign bonds edged up in the US and declined in the euro area (the German Bund reached a new minimum yielding -0.58%).
Markets traded cautiously as investors shifted their attention from this week's monetary policy meetings to the resumption of trade negotiations between the U.S. and China.