World stock markets are keeping their eyes glued to oil prices and the good health of tech on Tuesday while the outlines of an agreement in the Middle East remain in the fog.
The Iranian government on Tuesday ruled out the idea of amending its proposals to put a lasting end to the war in the Middle East. The day before, President Donald Trump judged that the document sent by Tehran was good “to put in the trash”.
In the minds of investors, these comments postpone indefinitely the reopening of the Strait of Hormuz through which 20% of the world’s oil supply usually passes.
At 12:00 GMT, the two world crude benchmarks showed a barrel at more than 100 dollars (107.6 dollars for Brent from the North Sea, +3.25% compared to the day before and 101.38 dollars for American WTI, +3.38%).
“We doubt there will be any change in the diplomatic standoff between Iran and the United States in the short term, as the president and his team turn their attention to China and Wednesday’s summit,” said Kathleen Brooks, research director at XTB.
Within this same investment platform, however, analysts want to maintain hope, so as not to panic investors.
“The market mainly sees a pressure strategy rather than an immediate escalation,” says Antoine Andreani, head of research for XTB France.
“At 4 dollars per gallon, political pressure is becoming strong for the American administration. The markets therefore continue to favor a rapid de-escalation and an agreement before the major electoral deadlines,” he adds.
Will they be heard in the markets? New York should open lower, according to the trend of “futures” (futures markets) on the three main indices (Dow Jones -0.02%, S&P 500 -0.37% and Nasdaq -0.85%). The American market is awaiting inflation figures in April.
The action of the video game seller GameStop fell (-3.80%) after the refusal by the online commerce giant eBay of a purchase offer worth 55.5 billion dollars.
In Europe, the main European indices fell from Paris (-0.62%) to Milan (-0.80%), via Frankfurt (-1.07%) and London (-0.43%).
“The optimists on the stock market are gradually starting to run out of arguments,” observes Andreas Lipkow of CMC Markets.
“Energy prices remain high, the rally (upward movement) in the semiconductor sector has reached a very advanced stage and the data released today in the United States could confirm inflationary concerns in the market”, he adds.
UK borrowing rates soar
On the government debt market, UK borrowing rates reached record highs.
The yield on the 10-year Gilt reached 5.1% (+10.4%), and 5.78% at 30 years (+11.30%).
Calls for the resignation of British Prime Minister Keir Starmer increased on Monday, after Labour’s bitter electoral defeat last Thursday.
“The bond market is reacting not only to Starmer’s possible departure, but also to the possible identity of his successor,” summarizes Kathleen Brook for XTB.
“This would mean that investors, 25-30% of whom are foreign buyers of UK government bonds, are demanding a higher risk premium,” adds Anna Macdonald, director of investment strategies at Hargreaves Lansdown.
In continental Europe, the yield on the ten-year German Bund continued to rise (3.08% against 3.03% the day before), as did its French equivalent (3.71% against 3.65 the day before).
Creditors who lend money to States thus anticipate risks of inflation which would reduce the real value of their debt securities.
st/meh/abx
