The European stock markets have managed to weather with some success the threat that in recent weeks had reactivated all the alarms regarding a new global financial crisis. With the rise of 0.28% this Friday, the Ibex-35 closed above 9,232 points, with a positive weekly balance of 5%.
The increases registered in the last five sessions have made it possible to minimize the losses of March to 1.7%, a period marked by extreme volatility after the fall of Silicon Valley Bank and other regional banks in the US. So the gains in the first quarter still remain intact above 12%.
The experts point out that you should not throw the bells on the fly. Uncertainty about how the banking shock – which in Europe had its own chapter with the collapse of Credit Suisse – will impact the real economy still hangs over the market. But it is true that the call for calm from supervisors and regulators have convinced investors, at least for now.
All attention is now directed towards macroeconomic data, especially inflation and employment, which will undoubtedly mark the next decisions by central banks on interest rates.
In general, investors are breathing after learning that the euro zone is beginning to register more moderate inflation, although underlying rates continue to shoot up and show no sign of changing trend. “This inflation, which in developed economies is closely linked to the prices of services, is the most difficult to combat,” recall analysts at Link Securities.
In the US, the personal consumption price index, the PCE, was also released on Friday, which is the most followed price variable by the Federal Reserve (Fed). And the reaction has also been relief. The indicator fell from 5.3% to 5% in February, better than expected. In monthly terms, it fell 0.3% from 0.6% the previous month and 0.5% expected.
The positive side of the crisis
Furthermore, some analysts are beginning to anticipate that the banking crisis may have some disinflationary effects, something that could help the ECB to cheer the market if it ends the rate hike process sooner than expected.
More doubts exist regarding the future of the banking sector, especially hit by the crisis of confidence in recent weeks and which, now, faces the possibility of greater regulation. This same week, the US announced that it is studying new measures to reduce the risk of future crises in the largest entities. Among them, higher liquidity and capital requirements, stricter stress tests and a kind of “living wills” to detail possible processes of liquidation of entities.
So far, Europe has not made a statement in this regard, although few doubt that greater regulatory tension will be inevitable in the medium term, adding some downward pressure to the sector.
In fact, the sector once again led the losses on Friday, with falls of more than 2% for Bankinter and Sabadell, 1.8% for CaixaBank, 1.6% for Unicaja and 0.75% for Santander. None of the six entities has yet recovered its price prior to closing on Thursday, March 9, at the height of the crisis. Sabadell and Bankinter are the worst off, still being at more than 20% of those levels.