European stock markets fall after the ECB insists that rates will respond to inflation

The main European stock markets have fallen this Monday after the president of the European Central Bank (ECB), Christine Lagarde, said that interest rates will rise as long as inflation is high.

Paris has lost 0.96%; Milan, 0.78%; Frankfurt, 0.54%; Madrid, 0.3%; London, 0.1%; and the Euro Stoxx 50 index, which groups the largest listed companies, 0.7%.

After some good PMI data in China and increases in Asia (the Nikkei has advanced 2.2%), the European markets opened with different signs with Paris and Milan clearly down, Frankfurt with doubts and Madrid and London positive.

In Germany it was known that exports rose in April, including those destined for China, and imports fell due to weak demand (the country revised its first quarter GDP downward a few weeks ago).

The words of Lagarde, who was appearing in the European Parliament today, have been received with sharp falls in the European markets, which have also accused the decline of Wall Street (at the close in Europe it was losing 0.4%).

The ECB president has said that “there is no clear evidence” that core inflation has peaked and that the effects of rate hikes “are beginning to materialise.”

With the euro at 1.07 dollars, 0.22% less, Brent oil moderated its rise to 1.7%, up to 77.4 dollars a barrel, (at dawn it was close to 79 dollars), after Saudi Arabia will announce an additional production cut to the one already applied by OPEC+ to push the price up.

The move by oil producers “in general appears to represent an adjustment of oil policy to economic realities,” referring to the slowdown in the major economies, especially China, Swiss bank Julius Baer said in a report.

As for debt, Germany’s ten-year bond, considered the safest, has risen less than seven basis points and has closed with an average yield of 2.377%.