We started the week with a more optimistic sentiment in the markets, on the one hand, due to a lower perception of danger in the conflict in the Middle East, and, on the other hand, due to the boost in the technology sector given the good results published yesterday in the United States by big technology. Also in Europe, the improvement in consumer confidence and the reduction of the public deficit by one tenth in 2023 slightly stands out.
The geopolitical tension marked punctually and later diluted at the end of the week, a few days in which a scenario of caution and prudence was drawn that will determine the decisions to reduce rates by the FED. While the context seems more likely for the ECB to initiate that starting signal for rate cuts.
For François Villeroy (ECB) the tension in the Middle East should not delay the rate cut in June. The president of the French central bank considers it unlikely that this geopolitical tension will cause energy prices to rise since this fact should not affect the ECB's decision-making regarding whether to reduce rates in June.
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