Evolution of the international financial markets and evaluation of the main events and economic indicators of the previous day session. Available in English.
Investors continued to err on the side of caution on Wednesday, balancing out data showing US inflation cooled slightly more than expected in March with warnings set out in the minutes of the last Fed meeting of the risk of a mild recession in the US later this year.
A session with mixed results across markets on Tuesday, as investors returned from the Easter holiday and took position ahead of the March inflation report in the US today. The Fed also releases the account of its March meeting.
Investors started the week trading with a cautious approach, in a session characterized by low volumes due to Easter holidays (financial markets were closed in most European countries as well as in Australia and Hong Kong).
Economic data releases centered the stage on Tuesday, in particular the JOLTS survey, which showed job openings in the US fell to 9.9 million in February, down from 10.6 million vacancies in the previous month. This level, the lowest since May 2021, pushed down the vacancies for unemployed ratio from 1.9 to 1.7, still above historical average.
In yesterday's session, investors' concerns about the pace of economic activity in the coming months led to a generalized risk-off sentiment. In particular, the US manufacturing ISM declined from 47.7 to 46.3 while the prices paid subcomponent fell too (from 51.1 to 49.2).
On Friday, the release of HICP inflation data in the euro area centered the stage in financial markets. Headline inflation fell sharply from 8.5% to 6.9% y/y in March, but core inflation ticked up to 7.5% in a sign that price pressures are persisting. In this context, ECB member Villeroy de Galhau said there are still some more rate hikes to do.
Equity markets extended a rally across the globe on Thursday, as investors continued to switch their focus away from the stress in the banking sector and instead pondered about the likely path of monetary policy decisions ahead.
Investors traded with a risk-on mood on Wednesday. The main drivers were a rally in tech stocks, boosted by the restructuring plans from China’s Alibaba Group, as well as receding fears of contagion from the banking turmoil.
Precaution remained the key theme during a session with mixed results on Tuesday. Positive survey data in the US (the Conference Board’s consumer confidence index surprised by rising to 104.2 in March) suggested limited spillovers so far from the banking sector turmoil on consumer confidence.
Investors started the week trading with more appetite for risk, as concerns about the banking sector receded following the announcement that SVB is to be acquired by another institution (First Citizens Bank & Trust) and news reporting additional support from the US authorities for regional banks.
In the last session of the week, investors continued to trade with a risk-off mood amid continuing turmoil in the financial system. Doubts about the health of the banking sector led traders to think that central banks will have to stop hiking rates and start cutting them soon.
Monetary policy decisions remained the key focus for investors on Thursday. The Bank of England and the Swiss National Bank raised rates by 25bp and 50bp to 4.25% and 1.5%, respectively, following the move by the Fed on Wednesday to hike rates by 25bp and to signal that there could be additional increases if financial turmoil recedes.