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(Il Sole 24 Ore Radiocor) – European stock markets are moving cautiously, after the president of the Fed, Jerome Powell, has postponed the moment of cutting interest rates due to the higher than expected trend in inflation. If inflation remains at high levels, the Fed “can keep interest rates at their current level for as long as necessary.” The market now expects a cut of only 25-50 basis points between now and the end of the year, with the first easing in September. In Europe, investors are hoping that the ECB can still proceed with a rate cut in June. President Christine Lagarde underlined that, unless “new shocks” are on the way, the moment is approaching when the central bank will have to “moderate restrictive monetary policy”. Furthermore, the risks of escalation of the conflict in the Middle East remain at the center of investors’ attention.
Thus the FTSE MIB of Milan, the DAX 30 of Frankfurt, the IBEX 35 of Madrid, the FT-SE 100 of London are traveling with caution, after inflation in March in the United Kingdom slowed to +3, 2% year-on-year from 3.4% in February. The CAC 40 in Paris rose more strongly, while the AEX in Amsterdam fell.
In Milan Diasorin stands out, St follows in the wake of its rival Asml
On Piazza Affari Diasorin is positioned at the top of the list while analysts expect good results in the first quarter of the year. Davide Campari and Prysmian also did well. Purchases in the banking sector, fueled by the prospect of a less rapid than expected decline in interest rates, were therefore Banca Pop Sondr, Banca Mediolanum, Banco Bpm and Banca Mps. Stmicroelectronics is trailing behind in the wake of rival Asml’s accounts which saw profits and orders drop in the first quarter, however exceeding analysts’ expectations.
Spread rising to around 143 basis points
The spread between BTp and Bund is rising. The yield differential between the benchmark 10-year BTp and the German Bund stands at 143 basis points from 142 basis points at the latest reference. The yield of the benchmark ten-year BTp also increased, opening the session at 3.91% from 3.90% the day before.
Euro/dollar little moved, oil slows while gas rises
On the currency market, the euro/dollar has moved little around 1.061 (from 1.0624 on the day before closing). The price of oil is falling, with the May future for WTI below 85 dollars a barrel, while the June delivery of Brent returns below 90 dollars. The rise in natural gas on the TTF platform in Amsterdam continues, reaching above 33 euros per megawatt hour. Gold slightly down below $2,380 an ounce.