EU stock markets rise as anticipation builds for Warsh’s speech at Jackson Hole. Banks stage a rebound in Milan

(Il Sole 24 Ore Radiocor) - European stock markets are on the rise European stock markets are on the rise in the wake of Asian gains, whilst the market’s attention is focused on the anticipation surrounding the speech by the Fed chairman, Kevin Warsh, at the annual central bank symposium in Jackson Hole. In particular, investors are expecting greater clarity on the future course of monetary policy, given that Warsh has so far deliberately refrained from providing any guidance on the US central bank’s plans to ensure price stability. The futures market, based on data from the CME FedTool Watch, currently prices in a 66 per cent probability that rates will remain unchanged at the upcoming September meeting.

So, whilst attention also remains focused on the developments in the Middle East – with the prospects of an agreement on the reopening of the Strait of Hormuz looking increasingly slim – the FTSE MIB in Milan, the CAC 40 in Paris, theDAX 40 in Frankfurt and other European stock markets.

On the stock market, banking shares are performing well on the Milan Stock Exchange, with attention focused in particular on the key players in the banking sector. Consequently, Mediobanca, Banca Monte Paschi Siena and Intesa Sanpaolo . But the buying also favours Unipol and Bper Banca. Meanwhile, on the eve of the announcement, the board of directors of Generali confirmed its willingness to consider MPS’s proposal regarding Banca Generali , whilst emphasising that no agreement has been reached. Oil companies performed well, with Saipem and Tenaris performing well, whilst the defence sector is weak, with Avio , Fincantieri and Leonardo bring up the rear.

The decline in the oil price continues to fall, despite hopes for a reopening of the Strait of Hormuz looking increasingly slim. October Brent is trading at around $89 a barrel and WTI for the same month at around $83. Whilst the Trump administration has informed mediators that it has no interest in returning to the terms of a preliminary agreement reached with Iran – which subsequently fell through – the market has chosen to cling to the positive signals that emerged earlier this week from the agreement reached between Iran and Oman, regarding the distribution of revenues from the Strait of Hormuz, which has fuelled hopes that the waterway might reopen to oil tankers. European European natural gas on the Amsterdam platform, where it is trading at 68 euros per megawatt-hour.

On the currency market, the US dollar has seen little movement, with the single currency trading at around 1.164 against the greenback. According to OCBC Group Research, the greenback ‘could find support if Warsh and other Fed officials allay fears of currency devaluation and reaffirm their commitment to bringing inflation back to the 2 per cent target’. Bitcoin is down to around $79,700. Gold is largely unchanged, with the spot price at around $4,580 per ounce.