01 juny 2021
European equities dropped as investors looked for the next catalysts to give the market direction. In Spain, shares of utility companies dropped over a draft bill the government is preparing that could drive down electricity prices.
Evolution of the international financial markets and evaluation of the main events and economic indicators of the previous day session. Available in English.
European equities dropped as investors looked for the next catalysts to give the market direction. In Spain, shares of utility companies dropped over a draft bill the government is preparing that could drive down electricity prices.
In the last session of the week, global stocks remained near record highs lifted by the ongoing economic recovery from the pandemic and injections of fiscal and monetary policy stimulus.
Financial markets recorded another day with positive results, following the release of solid economic data in the U.S.: new jobless weekly claims fell to a new pandemic-era low and core capital goods orders rose by 2.3% in April, in both cases above expectations. U.S. Treasury Secretary Yellen also reiterated that the rise in inflation should be transitory.
Investors continued to trade with a risk-on mood on Wednesday, easing worries about rising inflation and shrugging off hawkish signals sent by some Fed officials throughout the week, including Fed Vice Chair for supervision Randal Quarles. Equity markets rose modestly, led by tech stocks, while volatility receded.
During a volatile session, markets erased some of the early gains after comments by Fed VP Richard Clarida noting that the central bank could start discussing in upcoming meetings adjusting the pace of asset purchases (tapering). In addition, house prices in the U.S. continued to accelerate while consumer confidence stalled.
Investors traded with a risk-on mood at the start of the week, reversing some of the losses of the previous sessions. In the U.S., tech stocks led the equity markets rebound, following comments by Fed officials, including governor Lael Brainard, reiterating that they see the spike in inflation as transitory.
In yesterday's session, investors traded with a risk-on mood and drew away from safe-haven assets as new weekly jobless claims in the US posted the smallest figure since the start of a pandemic (444k).
Yesterday, investors traded in a risk-off session in which stock indices declined across the board, core euro area sovereign yields ticked down and the US dollar strengthened against most currencies.
In yesterday's session, investors weighed the reopening of economies against inflationary pressures concerns. On the latter, nevertheless, ECB's Villeroy de Galhau said that the inflation spike in the euro area is likely to be temporary and that the monetary policy stance will remain very accommodative for a long time.
Rising COVID-19 cases in some regions and inflation concerns, particularly in the US, were yesterday's main drivers in financial markets. Fed Governor Richard Clarida, though, eased fears of an early monetary policy tightening as he said that April's disappointing employment report showed that further substantial progress has not been made yet.
Investors ended the week on a positive mood. In stock markets, volatility declined and equities surged across advanced and emerging economies on Friday, partially reversing the losses suffered in previous sessions. In FX markets, most advanced and emerging currencies also recovered some ground against the USD.