European markets started the week positively, with the Milan Ftse Mib index up by 0.58%. The previous week had seen a 2% decline, the first correction after ten weeks of gains. Other European markets also showed gains, with Frankfurt up by 0.63%, Paris up by 0.58%, and London up by 0.16%. This positive trend was supported by the German industrial production data for February, which showed a monthly increase of 2.1%, exceeding economists’ average expectations of 0.6%. As a result, industrial and energy stocks in Europe saw an increase, with Interpump (+3.47%) and Iveco (+2.81%) leading the gains on the Milan Stock Exchange.
The key event for European markets will be the European Central Bank (ECB) meeting on Thursday to discuss interest rates. Analysts do not anticipate a rate cut at this meeting but will be looking for clues about future meetings. Expectations are for a first rate cut in June, with potentially two or three more cuts by the end of the year. Before that, on Wednesday, the US inflation data will be released, followed by the job market data released last Friday. In March, 303 thousand jobs were created, almost 100 thousand more than expected. If the base inflation rate were to decrease as expected, it would be an ideal scenario for both the markets and the real economy.
However, concerns remain about the conflict in the Middle East. The Brent crude oil price today crossed the $90 per barrel mark, after temporarily dropping below that threshold following Israel’s partial withdrawal from the southern Gaza Strip. Additionally, there is a new record high for gold, trading at $2,350 per ounce. It was reported today that China has increased its gold reserves for the 17th consecutive month.
Overall, the positive start to the week for European markets is attributed to the strong German industrial production data, as well as anticipation of the upcoming ECB meeting. The gains in industrial and energy stocks reflect optimism about the economic recovery in Europe. However, market participants are closely monitoring the inflation and job market data in the US, as well as the ongoing conflicts in the Middle East, which are contributing to volatility in commodities such as oil and gold. Investors are also attentive to the potential for further rate cuts by the ECB in the coming months, as well as any signs of economic recovery in the region.
