At the same time, the barrel of Brent fell from $ 68 to a few sessions. However, the situation remains uncertain, with in particular the risk of closing the Strait of Ormuz by which transit 20 % of the transport of world oil and natural gas, which would not be without causing considerable changes in market expectations on inflation.
Vigilant
For the coming months, Philippe d’Orgeval (Deputy Cio of Amundi) stresses that it should not be released on American assets, in a context where the impact of the rise in prices should gradually start to impact growth during the summer months. “We are counting on an average increase in prices of around 15 % for all imports in the United States. This will have an impact on economic data strongly followed by the Fed (employment, inflation, growth) and should push it to react during the next quarters”. He expects three decreases from the American guidance rate by the end of the year.
The margins of American companies could also start to show signs of weakness during quarterly results publications. “The risk of closing the Strait of Ormuz is a major risk for global economic prospects, as well as a resurgence of trade tensions when the moratorium on prices will expire”still estimates Philippe d’Orgeval.
Is the “worst scenario that could happen” for Europe after American attacks in Iran likely?
Finally, the impact of the Trump administration’s budget plan is another element that could push the Fed to be more aggressive. Philippe d’Orgeval (Amundi), however, considers unlikely to see the rate at 10 years American climbing strongly above 5 %. “Reaching this psychological threshold would certainly lead to a reaction from the Fed, as well as movements to the purchase of investors in search of yield”.
Elia at the top
The gains were more moderate in Europe, with an increase of 1.5 %for the Bel 20 index. The underperformance of AB INBEV was more than offset by the groups exposed on technology (Melexis+ 7.5 %) and Sofina (+ 10 %), as well as by UCB (+ 9.4 %). With an increase of 3.8 %, Elia should also finish the semester at the top of performance on the Bel20 index, with an increase close to 40 %.
For the next few months, the watchword of many strategists is today to diversify exhibitions outside the American market, and in particular to continue a rebalancing towards European assets, whether towards actions (notably small and medium capitalizations) or business debt.
