Evolution of the international financial markets and evaluation of the main events and economic indicators of the previous day session. Available in English.
In yesterday’s session, investors traded cautiously ahead of today’s ECB monetary policy meeting, where we expect official interest rates to remain unchanged (depo and refi at 4.00 and 4.50%, respectively) and a continuation of the data dependency approach.
In yesterday's session, investors traded cautiously amid mixed economic data releases. In the US, the services ISM declined from 53.4 to 52.6 in February, with the prices paid subcomponent declining from 64.0 to 58.6,. easing analysts' concerns of a further spike in inflationary pressures.
In the first session of the week investors traded cautiously as they wait for new messages coming from central bank officials on the interest rate path ahead. In particular, all eyes are on the ECB Governing Council meeting on Thursday, where the ECB is expected to keep rates unchanged and reiterate the data dependency approach for 1H2024.
In the last session of the week, investors traded with a moderately optimistic tone amid economic data releases that offered mixed signals on the monetary policy path ahead. On the one hand, the US ISM manufacturing index fell from 49.1 to 47.8 (49.5 expected), with employment and new orders subcomponents decreasing.
US January PCE deflator came in line with expectations (2.4% yoy down from 2.6% the previous month), and euro area countries’ CPI did not surprise either (Germany: 2.5% yoy, France: 2.9% yoy, Spain: 2.8% yoy), boosting markets’ expectations of a first interest rate cut starting in June and July.
Yesterday’s session in financial markets was a quiet one without any major macroeconomic data releases and with the Q4 2023 corporate earnings season nearing its end. All eyes remain attentive to today’s release of January’s US PCE deflator, the Fed’s favored inflation gauge, and some euro area countries’ CPI.
Investors traded cautiously in yesterday’s session as they await key inflation data this week. The unexpected drop in US consumer confidence index to 106.7 (vs. 115 expected) from 110.9 in January, and the low levels on confidence in Germany (Consumer Confidence Index at -29 as expected), did little to move markets yesterday.
Financial markets started the week with a slight risk-averse tone as investors await inflation data, to be released later this week, that will be key in determining interest rates’ future path. Sovereign bond yields rose across the board, while equity indices edged lower in the US and the euro area.
During Friday’s session, markets traded with a slightly higher risk appetite to end a week without any major economic data releases. Sovereign bond yields fell across the board, most notably on the longer ends of the curves, while the main equity indices advanced slightly.
In yesterday’s session, a mixed release of February’s flash PMIs and a patient tone on inflation from the ECB, according to the last meeting minutes, were the main drivers in financial markets. Sovereign yields edged down in the euro area while increasing in the short end of the US treasury curve. Stock indices managed to advance across the board.
The hawkish rhetoric from central bank officials was the main driver in yesterday's session, which saw sovereign yields on the rise in the euro area and in the US. In the ECB, Pierre Wunsch said that interest rates might remain at restrictive levels for longer than previously anticipated considering the labor market strength and increasing wages.