Evolution of the international financial markets and evaluation of the main events and economic indicators of the previous day session. Available in English.
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.
Investors started the week trading with a cautious mood, still digesting the mixed US employment report released on Friday and awaiting tomorrow's key CPI inflation data. Also, comments from San Francisco Federal Reserve President Mary Daly pointed to further interest rate increases even if signaling the end of the hiking cycle is nearing.
In the last session of the week, a mixed US labor market report left investors trading cautiously. While the pace of job creation eased to the lowest reading in 30 months in June (209k) and the previous two months were revised lower, wage increases remained elevated (4.4% y/y) and the unemployment rate ticked down to 3.6%.