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In yesterday’s session traders searched for safe-haven assets, following weak economic data and hawkish comments from some ECB members, arguing in favor of a 50bp hike in the policy rate in July.

Investors traded with a risk-on mood on Monday after Joe Biden signalled he would reconsider tariffs imposed to China by the Trump administration and Christine Lagarde offered a clear guidance on the next steps for the ECB.

On Friday, investors traded cautiously as they continued to assess the economic outlook for the main advanced economies. Stock indices rose modestly in the euro area while, in a volatile session, the S&P 500 closed barely flat. Emerging economies’ indices registered solid advances.

A global selloff in stock markets continued on Thursday, as worries mounted about the direction of the global economic recovery and the potential spillovers on the outlook for companies’ earnings.

Risk-off sentiment returned to financial markets on Wednesday, as investors reassessed the outlook for the global economy amid the jump in inflation and the rapid withdrawal of monetary policy accommodation. These factors are weighting in the earnings projections of the private sector.

Risk appetite returned to the fore on Tuesday, as “buy-the-dip” movements and solid economic data provided some comfort to investors’ sentiment, easing worries of an economic recession.

Volatility continued to dominate across financial markets at the start of the week, fueled by mounting concerns about the health of the global economic recovery, after the release of weaker-than-expected monthly economic indicators for April in China on Monday.

Investors' sentiment improved at the end of the week amid comments from Federal Reserve president Jerome Powell signaling that 75 basis points increases are, for now, off the table.

Investors traded with a risk-off mood in yesterday's session, fueling the demand for safe-haven assets. The main concern continues to be whether central banks will be able to tackle down inflation without triggering a recession.

In yesterday's session, investors' expectations on inflation and the path central banks could follow in the coming months remained the key drivers. The moderation of US inflation in April (headline -0.2pp to 8.3% and core -0.3pp to 6.2%) suggests that the peak may have already been in March. 

In yesterday's session, sentiment recovered somewhat as investors continued to assess the inflation and growth outlook amid several central bank officials’ comments.

In the first session of the week, investors' sentiment deteriorated amid concerns on whether the ongoing withdrawal of monetary policy accommodation will be able to tackle inflationary pressures without leading to a recession.