European stock markets are trending negatively due to concerns about a return to a climate of high tension in the Middle East and the fact that an agreement that will reopen the Strait of Hormuz to traffic has not yet been reached.
The failure to reach a concrete agreement to end the war between the USA/Israel and Iran causes geopolitical risk pricing to continue in the markets.
While the parties could not leave the negotiation table with a positive outcome within the scope of the ceasefire achieved in the Middle East on April 8, new threatening statements every day reveal the fragile nature of the ceasefire process in question.
Tensions in the Middle East, high energy costs and developments that may lead to political uncertainty in the UK are the focus of the European agenda.
While the high course of energy costs in the region fuels current inflation fears, markets continue to price that the European Central Bank (ECB) may raise a total of 3 interest rates by the end of the year.
Inflation data to be announced this week in the Eurozone and the UK will provide clear information about the course of these risks. Analysts noted that signs of possible acceleration in inflation data in the UK could increase the selling pressure in the country’s bond market.
On the other hand, Kaja Kallas, High Representative of the European Union (EU) for Foreign Affairs and Security Policy, stated that the USA, China and Russia “do not like the EU” and said, “The reason why these powers want to dissolve the European Union is that we are much stronger when we are together.” he said.
In European markets, as of 10.25, the Stoxx Europe 600 indicator index is at 602 points, with a 0.7 percent decrease, and the FTSE 100 index in the UK is at 10,173 points, with a 0.2 percent decrease.
In Germany, the DAX 40 index is at 23,828 points with a 0.5 percent loss of value, in Italy the FTSE MIB 30 index is at 48,120 points with a 2 percent decrease, in France the CAC 40 index is at 7,875 points with a 1 percent decrease and in Spain the IBEX 35 index is at 17,509 points with a 0.6 percent loss.
