After Tuesday's risk-off session, which caused sharp declines in sovereign yields and losses in stock markets, investors traded yesterday with more optimism amid Jerome Powell positive comments about the strength of the US economy.
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In yesterday's session, investors remained cautious and still showed some preference for safe assets, such as the US dollar or the Swiss Franc, against equities.
In yesterday's session investors traded with cautious optimism, weighting solid economic data with negative comments by Russian authorities about the lack of progress in negotiations with Ukraine. Today, US President Joe Biden and his Chinese counterpart Xi Jinping will hold a meeting to discuss the ongoing conflict.
Investors traded with a risk-on sentiment on Thursday, following better-than-expected economic sentiment data across advanced economies and after EU leaders refrained from imposing sanctions on Russian energy exports. The US government also announced a plan to boost supplies of liquified natural gas to the EU.
Financial markets experienced risk-on flows as investors read positively the advances in Russian-Ukrainian talks. Despite not reaching a deal to cease fire, both sides agreed to de-escalate the conflict. In this context, volatility declined and stock indices rose across advanced and emerging economies' trading floors.
In yesterday's session, investors' sentiment worsened amid mixed signals in the ongoing Russian-Ukrainian talks, concerns about gas supplies in Germany and rising inflationary pressures in the euro area. In Germany and in Spain, inflation rose in March to 7.6% and 9.8%, led by an increase in energy prices.
Investors ended the week with cautious optimism, with equity indices rising across Europe and emerging markets but with mixed results in the US. Bank shares continued to outperform, reflecting expectations of a more aggressive interest rate normalization in advanced economies.
Risk appetite returned to the fore on Tuesday, as “buy-the-dip” movements and solid economic data provided some comfort to investors’ sentiment, easing worries of an economic recession.
A positive start of the week across financial markets, with sentiment boosted by resilient survey data in Europe and a relaxation of COVID restrictions in China. Markets were closed in the US due to a public holiday.
In yesterday's session investors traded cautiously amid mixed economic data and hawkish comments by Federal Reserve members. US manufacturing PMI and ISM moved in opposite directions, both remaining comfortably above the 50-threshold, and US job openings in April confirmed that the labor market remains tight.
In yesterday's session, central banks gave some fresh air to financial markets, fueling a relief rally across the board, with yields on sovereign bonds declining sharply in both sides of the Atlantic.
Markets ended the week with a relief rally, recovering only a fraction of the decline in previous sessions, after a week dominated by monetary policy decisions by major central banks and fears among investors of an economic recession.
Investors started the week trading cautiously optimistic, in a session characterized by low volumes due to a holiday in the US and no major macro data releases.
In yesterday's session, financial markets closed with mixed results as several drivers affected sentiment differently. While the easing of Chinese lockdowns measures boosted risk appetite, the worse-than-expected reading of US consumer confidence (98.7, down from 106.4) erased initial signs of recovery in risky assets.
In yesterday's session, investors traded with a risk-off mood as recessionary concerns spread across financial markets, following the release of the decrease in US real personal spending (from a downward revised +0.3% to -0.4% in May).
Investors started the week with mixed results, taking on board hawkish commentaries by some ECB officials and news reporting that the US government may announce a decision to lift certain tariffs on Chinese imports.
Risk aversion returned to the fore during a volatile session on Tuesday, as investors reassessed the risk of a global recession amid ongoing disruptions in gas supply in Europe and reports of new COVID cases in some regions in China.
In the first session of the week, investors' sentiment improved slightly and preference for riskier assets increased.
Investors focused yesterday on the ECB Governing Council meeting, where interest rates were raised by 75bp, and US Federal Reserve hawkish comments. Both central banks showed determination to tackle elevated inflation and to bring it back to their 2% target.
Risk aversion continued to set the tone on Thursday, with sentiment hampered by fears that elevated inflation could keep central banks in a tightening cycle for longer and the increasing threat of energy rationing in Europe this winter.