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 modestly ahead of today's Federal Reserve meeting, where we expect interest rates to be hiked by 0.25pp. Oil prices declined after lockdowns in China were announced, since that might dampen oil demand, and the barrel of Brent fluctuated below $100.
In the first session of the week, investors remained concerned about the developments in Ukraine and mounting inflationary pressures in advanced economies. Their expectation for a tighter monetary policy from the ECB and the Federal Reserve pushed interest rates up.
In the last session of the week, investors traded cautiously amid ongoing talks between Russian and Ukrainian authorities, although during the weekend Russia intensified aerial attacks on the western part of Ukraine. This week talks are expected to continue between both countries and officials from China and the US will also hold a meeting.
Macroeconomic events and data releases shadowed latest developments of the Ukrainian war, as the ECB meeting and US CPI inflation centered stage in financial markets. On the latter, headline inflation rose as expected in February from 7.5% to 7.9% and core inflation rose from 6.0% to 6.4%.
In yesterday’s session, investor sentiment improved and preference for riskier assets rose ahead of today’s meeting in Turkey between Ukraine and Russia foreign ministers. In addition, a Ukraine top foreign policy aide insisted that Ukraine is ready for a diplomatic solution. Brent and European gas prices moderated.
In yesterday's volatile session, investors remained concerned about the implications the Russian-Ukrainian conflict can have on economic activity and inflation. Nevertheless, rumors that the EU is discussing a plan to increase the joint issuance of bonds benefited risk perception in Europe.
Financial markets started the week with a sell-off session in stock markets as energy prices rose sharply following threats from the US to restrict oil imports from Russia and Russia threats to cut gas flows to Europe. In addition, the euro area investor sentiment index Sentix declined to -7.0 in March, the lowest level since November 2020.
In the last session of the week, investors traded with a risk-off mood and increased their demand for safe-haven assets.
In yesterday's session, investors remained cautious and still showed some preference for safe assets, such as the US dollar or the Swiss Franc, against equities.
After Tuesday's risk-off session, which caused sharp declines in sovereign yields and losses in stock markets, investors traded yesterday with more optimism amid Jerome Powell positive comments about the strength of the US economy.
Yesterday, financial markets suffered another risk-off session amid rising concerns among investors about the impact the Russian-Ukrainian war may have on the global economy. According to inflation swaps, financial markets expect prices to increase in the short run, while the expected ECB and Fed policy tightening lost some steam.