Cautious EU stock exchanges, week marked by US inflation. Germany, industrial production falls

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(Il Sole 24 Ore Radiocor) – Cautious start for European stock exchanges after good performance recorded on Friday in the wake of better-than-expected data on the American labor market. The indicator helped to assuage fears about a US recession, but at the same time convinced investors that the Federal Reserve could keep rates at their current high levels for longer. Currently, Fed Funds futures assign a greater than 90% probability that the status quo will be maintained at the June summit, but if they previously bet on a rate cut as early as July, now an easing is not expected before September. During the week, the data on US inflation for April, expected on Wednesday, will therefore be crucial, which could put this scenario to the test and even lead to fears of a new rate hike.

Meanwhile, they crawl the FTSE MIB of Milan, the CAC 40 of Paris, the DAX 40 of Frankfurt, after the decline in industrial production in Germany (-3.4% on month, but +1.8% on year), theIBEX 35 in Madrid, l’AEX of Amsterdam. London closed for the festivities associated with the coronation of King Charles III. Asian stocks generally progressed with the exception of Tokyo, where the market reopened after a three-day holiday last week.

Euro strengthens, oil and gas prices also rise

In the currency market, the euro strengthened to $1.1043 from $1.1012 at Friday’s close. The single currency is also worth 148.77 yen (148.65), while the dollar/yen ratio is 134.71 (134.86). The price of oil consolidates its positions after the recovery achieved on Friday: WTI in June trades at 71.79 dollars a barrel (+0.63%), Brent in July at 75.72 dollars (+0.56%). The price of natural gas on the Amsterdam TTF platform fell by 1.8% to 35.9 euros per megawatt hour.

Positive Asian stock exchanges, Tokyo closes against the trend

The Asian stock exchanges close in positive territory driven by the performance of Chinese stock markets. A serene climate returns to the markets afterwards US employment data which help ease worries about a recession. Going against the trend, Tokyo closes the session with a drop of 0.71%. On the foreign exchange market, the Japanese currency appreciates against the dollar, from its lows in 5 weeks, trading at 134.60, and against the euro at 148.70. While negotiations are still ongoing, Hong Kong (+0.9%), Shanghai (+1.7%), Shenzhen (+0.4%), Seoul (+0.5%) and Mumbai (+1, 1%). Poor day for macroeconomic data with only German industrial production declining beyond expectations. On the front of central banks, the speech by ECB member Philip Lane is expected in Berlin.

The news to monitor

German industrial production fell by 3.4% in March. This was announced by the Federal Statistical Office (Destatis). The figure is worse than estimates with economists expecting a 1.5% drop. The decline in March follows a 2.1% increase in industrial production in February. Considering the first quarter of the year, production increased by 2.5% compared to the fourth quarter of the previous year. A speech by Lane (ECB) is also scheduled at 4pm

Friday day

Very positive session on Friday for the European stock exchanges which accelerate upwards thanks to the US data on employment. The Ftse Mib gained 2.5% topping Europe and the Dax 1.4% More jobs were created in the US than expected with unemployment down to 3.4%. The market interpreted these data as a blow to the recession thinking however that they are strong enough to change the Fed’s neutral stance on rates. The impact of Apple’s results was also positive. In Piazza Affari Saipem flies by 6% in the wake of crude oil, Telecom up by more than 5% following the Board of Directors which assessed the offers for the network as inadequate. Among the banking Unicredit stands out by more than 4% The spread between BTp and Bund stands at around 190 points while it is flat at 1.10 against the dollar and recovers an initial decline after the US figure.

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