D-Day has arrived again after the last one in July (in which the organization kept the rates unchanged), this Thursday is the meeting of the European Central Bank (ECB) in which the market is discounting that. the bank will make a new reduction in the cycle of cuts that began in June with the first reduction. In addition, a technical cut is also expected, with which the ECB will adjust and bring the refinancing rate closer to the deposit rate (there is currently a difference of 50 basis points between the two).
Monetary policy has been one of the main players determining the future of markets in recent years. This meeting was no less so and investors are optimistically awaiting this new decline. In Europe, Futures of major indices are trading positivelywith gains of over 1.2% in the case of the EuroStoxx, the most bullish stock at the start of the session. The German Dax and the French Cac would also trade above 1%, which is struggling to become positive again over the year.
On the other side of the Atlantic, for the American Federal Reserve (Fed) to hold its meeting, we will have to wait until September 25, but for this organization, there is also the bet that it will lower rates and with it the cycle of cuts. begin . Until then and after the doubts that technology has raised in recent weeks, investors are gradually returning to Wall Street and futures contracts.Major US indices advancewith particular emphasis on the Nasdaq 100, the one that is increasing the most in futures contracts.
This return of investors to technology is also reflected in a return of the Asian stock markets, which were also the cause of the scares of this month of August. Thus, this Thursday, the Japanese Nikkei experienced a rise of more than 3% during the session, one of the largest increases in one day of the whole of 2024.
At the technical level, the Ibex 35 is very close to its intermediate resistance, marked by the Ecotrader expert, Joan Cabrero, at 11,280 points. Assuming the increases that the futures contracts are already pointing to this Thursday, once this level is exceeded, the Spanish index could end the selling pressure it was suffering and set off again towards the zone of the maximums of the year.
“Everything indicates that in the short term The Ibex 35 reached a ceiling of 11,436 points and from this environment, a correction phase of the previous rise could have started. The first important support was at 11,000 points. A short rebound seems vulnerable to me at the moment, especially when it does not even manage to fill the gap that opened to the downside from 11,280 points,” Cabrero explained a few days ago. Now, the selective is about to exceed these 11,280 points, which is a sign of strength.
However, Cabrero is careful to point out that the situation could be the opposite and become raw again: “By losing 11,000 points, the information that the market would give us is that the consolidation could be broader and deeper, and could go up to 10,690-10,740 points, where it would a priori be an opportunity to buy as long as the S&P 500 does not lose the key and critical support of 5,000/5,100 points.”
The European stock market, on the other hand, has had more technical difficulty in regaining its highs of the year, which it has found at 5,100 points. “The cancellation of the bullish series suggested that around 5,000 whole numbers had constituted a ceiling for the rebound that began at the lows of August 5 and the origin of a correction which should serve to adjust part of the strong rebound of 4,474 points. Well, we find ourselves in this correction,” contextualizes Cabrero.
This correction gains even more strength after the loss of 4,790 points last Friday, which indicated that the declines could deepen, according to the expert, to the area of 4,670-4,650 points. As with the Spanish stock market, Cabrero would recommend buying the European stock market again in this environment, as long as the S&P 500 remains on its supports.
Fixed Income Market
The start of the rate reduction process by the ECB and the Fed is shaping up to be a breath of air new to fixed income securities, which have been so volatile in recent years. The yields of the main papal banks of the Old Continent continue to ease on the day of the European Bank meetingwhich means that eventually you start earning with fixed income (with debt purchases the price goes up and profitability goes down).
On the European scene, the pack German, one of the continent’s most important 10-year-old newspapers, It lowers its yield to 2.1%, its lowest since early January. and about to start giving a lower profitability than it offered at the beginning of the year (2.06%).
While the debts of Spain and Italy are already at the lowest levels of the year, the British sovereign bond, one of the protagonists of 2024 (along with the French bond), is also approaching the lowest profitability levels of the year, highlighted in 2024 due to the political instability that led to early elections that ended in early July with the victory of the Labor Party.
On the currency market, after four consecutive days of decline, the euro is once again strong against the dollar (even with the drop in rates that weakens the European currency against the American currency) and is revaluing in these first hours of the session a slight 0.1% that is worth consolidating the 1,101 dollars by exchange rate.
