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' sentiment improved and recovered from Monday’s lows amid upbeat corporate results. Stock indices in the euro area and in the US rose as traders bought the dip (the S&P 500 registered its biggest daily increase since March).
In the first session of the week, investors traded with a risk-off mood amid rising COVID-19 cases and concerns that the Delta variant might delay the economic recovery. Demand for safe haven assets (such as US Treasuries, the Swiss Franc or the Japanese Yen) increased.
Last Friday, investors' sentiment worsened amid rising COVID-19 cases, now more contagious with the Delta variant.
Treasury yields fell as Federal Reserve Chairman Powell testified before Congress that rising inflation is likely to be transitory and that the central bank would continue to support the economy. The Bank of Japan left its 10-year bond yield target unchanged at about 0% after concluding its meeting and also kept the policy-balance rate at -0.1%.
Jerome Powell maintained his view that strong inflation will be temporary and said that the US economy was still far from levels the central bank wanted to see before tapering its monetary support.
Investors turned their attention to the start of second-quarter earnings season and to inflation concerns in the US, after the consumer price index jumped to 5.4% yoy in June (4.5% yoy the core index). This level is the higher seen since 2008 and fuels speculation that the Federal Reserve will begin curbing asset purchases soon.
The S&P 500 Index closed at another record high as investors looked to a highly anticipated second-quarter earnings season, which will start today with Goldman Sachs, JPMorgan Chase & Co. and PepsiCo Inc. European equities hit a record high with investors rotating out of cyclical sectors and into more defensive.
In the last session of the week, investors' sentiment improved and markets ended the day with positive results.
In a volatile session, investors’ sentiment was clouded by disappointing labour data in the US (new jobless claims unexpectedly rose to 373k during the first week of July) and uncertainty about the evolution of the pandemic. In Europe, the ECB confirmed a decision to modify its inflation target to a symmetric 2%.
Investors traded with a positive mood on Wednesday, easing concerns about a rapid withdrawal of monetary accommodation by the major central banks.
Financial markets ended the day with negative results, following the release of disappointing survey sentiment data in both the US (the services ISM fell to 60.1 in June from 64.0 in May) and in Germany (the ZEW sentiment indicator dropped from 79.8 to 63.3). In addition, industrial orders in Germany plummeted in May (-4% m/m).