European stock markets return to red after last Friday’s respite

The EURO STOXX 50 fell 0.7% at the opening to 3,675 points. The German Dax falls 0.53%, the ACC 40 Parisian left 0.83 and the FTSE MIB of Milan 0.37%. In London, the FTSE 100 fell 62%.

The expectations of a tightening of monetary policy that ends up derailing economic growth continues to be one of the major concerns of the market. The European Central Bank (ECB) will probably decide at its next meeting to end its stimulus program in July, and will raise interest rates “very soon” afterward, Pablo Hernández de Cos, a member of the ECB council, said on Saturday. The institution would thus follow in the footsteps of the US Federal Reserve and the Bank of England, which have already started down this path in recent months.

Another source of market concern continues to be the war in Ukraine. In the latest news, Russia has attacked new locations in eastern Ukraine in its attempt to encircle Ukrainian forces and repel a counteroffensive in the city of Izium. Meanwhile, Finland and Sweden are advancing to join NATO despite the reluctance shown by Turkey.

Joining the military alliance will “maximise” Finland’s security following Russia’s unprecedented invasion of Ukraine in February, President Sauli Niinisto said on Sunday. Russia warned last week that it would take “retaliatory measures” if Finland joined NATO, but Moscow did not specify what these might be.

Investors also know today the spring report of economic forecasts from the European Commission, while Eurostat releases the trade balance for March in the eurozone. In the US, at the macroeconomic level, the Empire State manufacturing index for May and the capital flows published by the Treasury will stand out.

Already at dawn in Europe, it was known that China’s economy slowed down drastically in April due to the effect of the confinements with which the authorities of the Asian giant are trying to combat Covid-19 in cities such as Shanghai.

Vodafone Grp Sp ADR is one of the great protagonists of the morning in Europe after learning that Emirates Telecommunications Group Company has bought a 9.8% stake in the British operator for about 4,400 million dollars.

The company, formerly known as Etisalat Group and now renamed e&, offered around 130 pence a share for the stake, according to calculations by Bloomberg. That’s a premium of around 10% to Vodafone’s closing price of 117.82 pence on Friday. The purchase makes the United Arab Emirates-based company Vodafone’s largest shareholder, ahead of BlackRock Inc., Vanguard Group Inc. and HSBC Holdings Plc.

Investors should also be attentive to the listing of the Swiss bank Credit Suisse, after the international press has reported that the entity seeks to replace its CEO Thomas Gottstein, beset by a series of scandals.

Meanwhile, the bank is finalizing an agreement in the US on the 690 million dollars that the mining company Bluestone Resources owes its clients, according to the Financial Times.

Another bank that could have change in its dome is the Spanish Santander Bankthat would have started the search for a replacement for its current CEO, José Antonio Álvarez.

Among the companies to publish their quarterly accounts today is the Irish airline Ryanair, listed on Wall Street.

Taking profits in the price of oil

In the commodity markets, oil prices fell this Monday in the early hours of the morning, with investors taking profits after the rise in last Friday’s session. However, fears persist about the supply of black gold, given the possible ban on imports of Russian crude being prepared by the European Union and the limited increase in OPEC production.

The oil futures Brent fell 1.2% to $109.89 a barrel, while US West Texas fell 0.95% to $107.28. Both references soared about 4% last Friday.

“Investors took profits after last Friday’s strong rally,” says Naohiro Niimura, partner at Market Risk Advisory.

“Even so, with the planned EU ban on Russian oil and OPEC production ramping up slowly, oil prices are expected to remain close to current levels, near $110 a barrel, until down later this year due to weakening global demand.”