The announcement of a U.S. Japan trade deal and hopes of a deal between the EU and the U.S. unleashed investors' risk onsentiment in yesterday's session. Global stock markets rallied and sovereign yields declined across the board. Safe havenassets (such as gold and the CHF) retreated while the EUR strengthened towards $1.18.
Market expectations about the Fed's next moves were little changed, with investors seeing no changes in July, assigning a65% probability to a 25bp September cut and pricing another cut in December. However, yesterday's session did see a dropin the market implied odds of an ECB September cut towards 40% (from 50%).
On the data front, consumer confidence improved in the euro area in July according to the European Commission's index (14.7, below its historical average but touching a 4 month high). Today the focus will be on the ECB's monetary policy meeting(markets assign a 99% probability to no changes in rates) as well as the release of July preliminary PMI indices.
BANCO BPI, S.A., com sede na Avenida da Boavista, 1117, 4100-129 Porto; Capital Social: € 1 293 063 324,98; matriculada na CRC Porto sob o número de matrícula PTIRNMJ 501 214 534, como o número de identificação fiscal 501 214 534. Intermediário financeiro registado na CMVM com o n° 300 e no Banco de Portugal sob o código n° 10. Agente de Seguros n.º 419527591, registado junto da Autoridade de Supervisão de Seguros e Fundos de Pensões em 21/01/2019, e autorizado a exercer atividade nos Ramos de Seguro Vida e Não Vida.