European stock indices were mostly firmer in early trade on Tuesday, despite some weakness across US stock index futures. Yet there was undoubtedly a cautious tone across equity markets as investors weighed geopolitical risks and shifting monetary policy expectations. Still, European markets have shown some resilience despite ongoing volatility in global energy markets.
As far as the UK’s FTSE 100 was concerned, the index continues to get a boost from gains in oil majors such as Shell and BP due to the jump in oil prices as the US and Israel attacked Iran at the end of February.
Source: TN Trader
Earlier this morning, both the Eurozone and German ZEW Economic Sentiment surveys crashed unexpectedly into negative territory for the first time since April last year. That was when President Trump unleashed his ‘reciprocal tariffs’ on Liberation Day.
Today’s survey results are a stark indication of investor pessimism, which could recover if the war were to end soon, on the condition that Iran is no longer a threat to global security.
Attention is also being paid to central bank decisions, with the Federal Reserve beginning its two-day policy meeting and set to announce its decision tomorrow.
The Fed has faced political pressure from Donald Trump to cut interest rates, but rising inflation concerns linked to the Middle East conflict have shifted expectations toward a pause. The Bank of England and European Central Bank will announce their respective decisions on Thursday.
