Financial Markets Daily Report

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Financial markets started the week in a cautious mood as investors await for the ECB monetary policy meeting on Thursday and for more Q2 earnings releases.

As July's main central banks meetings are getting closer, monetary policy is taking center stage in financial markets.

US monetary policy makers centered the stage in yesterday's session, as some Fed officials argued for a shift in monetary policy towards a more dovish stance.

Investor sentiment worsened slightly in a context of persisting trade tensions and mixed corporate earnings releases.

Trade tensions, monetary policy and economic data releases were the drivers of yesterday session.

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.

Investors traded cautiously in the last session of the week and stock indices rose mildly in most euro area trading floors and in the US (where the S&P 500 reached a new record high).

Stocks were mixed and sovereign yields ticked up as investors digested messages from central banks and a solid U.S. June inflation reading (headline: 1.6%; core: 2.1%).

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.

Markets traded cautiously in a session with few economic releases.

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.

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.