European markets will continue to be volatile, following suit of the mixed dynamics seen by the stock exchanges globally. But then, Europe’s markets have recently been much more moderately downbeat than the rest of the world’s markets.
For the EU markets, a key driver fuelling the uneasiness and insecurity is the US-China trade war outlook and how China’s economy’s prospects might be affected. As China’s industrial profits decreased after nine months of the current year, traders expect the country to face more economic challenges that might be triggered by the still unresolved US-China trade conflict. Though the People’s Bank of China has pledged policy support to the national economy that will be offered should the country be hurt by the challenges, investors understand that this would only allow the country’s to keep its economic performances at their current level.
Financial scouts note that investors are waiting for the S&P’s decision regarding Italy’s credit rating amid its budget standoff with Brussels. The country’s long-term credit rating by S&P has so far remained untouched at ‘BBB’. But now investors expect that Italy’s credit rating outlook might be downgraded to ‘negative’.
Yet another source of uncertainty is the global oil markets with its unstable prices showing mixed trade. What attracted the traders’ interest was that Iran’s top government officials say that the country’s oil exports will not fall below 1 million barrels per day on the looming new US sanctions.
Ivan Marchena, Libertex Analyst