Evolution of the international financial markets and evaluation of the main events and economic indicators of the previous day session. Available in English.
The US Federal Reserve meeting centered the stage in yesterday's session with a 25bp interest rate hike, as expected by the consensus. The description of the economic outlook was very similar to June's, while the president Jerome Powell recognized that the last CPI inflation release surprised them slightly on the positive side.
In yesterday’s session, investors weighed mixed signals from economic sentiment indicators in the US and in Germany. While the Conference Board consumer sentiment indices rose in July, signaling that private consumption might still have room to grow in Q3, the German IFO moderated.
The global economic outlook centered the stage in yesterday’s session as investors focused on July’s flash PMIs. In the euro area, the soft growth momentum was visible in the fall of the services (51.1) and manufacturing (42.7) indices. In the US, the manufacturing PMI rose and got closer to the 50-point threshold, but the services PMI lost steam.
In the last session of the week, investors traded cautiously in absence of key macroeconomic data releases and as they waited for monetary policy meetings this week in the main central banks.
Investors continued to trade with a cautious tone on Thursday, taking on board a new bath of data pointing to moderating inflationary pressures in Europe and a tight labour market in the US.
A lower-than-expected inflation data in the UK reinforced hopes among investors that disinflationary pressures are gaining traction, triggering a sharp depreciation of the British pound and a drop in the country’s sovereign debt yields.
A session with mixed results on Tuesday, as investors balanced out somewhat dovish comments from some key ECB officials with softer-than-expected activity data in the US (retail sales rose by 0.2% m/m in June while industrial production fell by 0.5% m/m) and a new batch of positive earnings reports from some US banks.
Investors started the week trading with a more subdued tone, with sentiment soured by data showing a slowdown in China in Q2 and by lingering inflationary concerns on the back of upside tensions in some agricultural prices.
Investors closed the week extending their appetite for risk, albeit consolidating and taking profits after the rebound recorded across asset classes in the previous sessions. Sentiment was also lifted by a positive start of the Q2 corporate earnings seasons, with better-than-expected results for the reporting large US banks.
In yesterday's session, investors continued to digest the lower-than-expected US inflation report for June and traded with a risk-on mood. In addition, US PPI data for June reinforced the disinflationary environment while St. Louis Fed President James Bullard, one of the most hawkish FOMC member in this cycle, announced his resignation.
A lower-than-expected reading of June’s US inflation led investors to project a lower path for the Federal Reserve’s interest rates. Concretely, headline and core inflation fell by 1pp and 0.5pp to 3.0% y/y and 4.8% y/y, respectively.
Investors traded in a subdued mood on Tuesday, as they awaited today’s US CPI report and digested the latest dovish comments from several Fed officials on Monday: Bostic, who said that inflation could be brought back to target without further rate hikes; and Daly, who said the Fed was approaching «the last part» of its hiking cycle.