European stock markets have slipped at the open, as expected. The Euro Stoxx index of 600 leading European shares fell 0.2%, as did the French market, while the German Dax edged down 0.1%, and Spain’s Ibex and the UK’s FTSE 100 were flat.
03:52
Naeem Aslam, chief market analyst at the Dublin-based broker AvaTrade, has looked at the stock markets.
US and European futures are trading stable on the first trading day of the week. Traders have started to brush away the uncertainty about the ongoing war in Russia and Ukraine. They are also feeling a lot more comfortable with the fact that the Fed has now started increasing the interest rate, and they hope that this hike in the interest rate will help the higher inflation situation in the US. Last week, we saw a serious rally for the three major US stock indices as they posted their best performance since November 2020. The S&P 500 index soared 6.1% last week. The Dow Jones Industrial Average increased by 5.5% while the Nasdaq index spiked 8.1%–the tech sector once again outperformed others.
The big question for traders is if we will see the continuation of that rally this week and if the stock traders will be able to defend those gains. The answer to that will very much depend on the ongoing geopolitical tensions between Russia and Ukraine and the economic data that will be released this week. The focus will continue to remain on the supply chain and earnings, provided that the situation continues to ease off in Ukraine. Speaking of hope, traders are looking at the peace negotiations between Russia and Ukraine. However, in reality, the chances of those becoming a reality are still slim as it is highly likely that Russia will not stop anytime soon unless Russia achieves its goal.
03:47
German producer prices rose 25.9% in the year to February, mainly because of higher energy prices, official figures showed this morning.
Energy prices jumped 68% compared with February 2021, the Federal Statistics Office said. Stripping them out, producer prices were still up 12.4% on the year.
03:45
Introduction: Oil prices rise as EU mulls Russian ban, Saudi refinery hit
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
At the start of the new week, oil prices have risen, with Brent crude above $110 a barrel, as European Union nations consider joining the United States in a Russian oil embargo. Adding to market jitters, Houthi rebels attacked a Saudi Aramco refinery over the weekend, temporarily disrupting production.
Brent crude is up more than $3 at $111.03 a barrel while US light crude is trading at $107.88 a barrel.
Prices moved higher ahead of a series of summits this week between EU governments and US president Joe Biden, where the Europeans will consider whether to impose an oil embargo on Russia.
The Moscow stock exchange has been shuttered for three weeks following the imposition of western sanctions on Russia, but is resuming limited trading today, in federal loan bonds.
European stock markets closed higher for the second week in a row last week despite there being little prospect of a ceasefire between Russia and Ukraine.
Michael Hewson, chief market analyst at CMC Markets UK, said:
Volatility levels have slipped back quite considerably from the levels we saw in the immediate aftermath of Russia’s invasion of Ukraine, with stock markets on both sides of the Atlantic posting their best week since 2020.
There appears to be a growing disconnect between what markets are doing and what is happening on the ground in Ukraine and the increasingly brutal measures that Russian forces are taking in trying to wear down resistance to their occupation, including the use of hypersonic missiles.
While markets appear to be focussing on the fact that peace talks are taking place, there is also little evidence that they are actually leading anywhere, given the distance between the two sides in respect of what they will accept, with Ukrainian President Zelensky saying at the weekend that Ukraine wouldn’t give up Lugansk or Donetsk in the east of the country.
Joe Biden’s ambassador to the United Nations warned on Sunday there was little immediate hope of a negotiated end to the war in Ukraine.
European markets look set to start the week lower, after a mixed Asian session where Japan’s Nikkei closed 0.65% higher, Hong Kong’s Hang Seng lost 1.1% and the Shanghai market was little changed.
The Agenda
7.30am GMT: European Central Bank president Christine Lagarde speaks
4pm GMT: US Federal Reserve chair Jerome Powell speaks
