Stock exchanges, traders confident about first part 2026. Believe in two Fed cuts
55% of the respondents anticipate rising stock prices in the first six months of the year, 70% share the market's expectations of the US central bank's moves, and the majority point to the stability of the euro/dollar. For 90% the spread will remain below 100 basis points
(Il Sole 24 Ore Radiocor) - Financial market participants show a good deal of optimism about the performance of stock exchanges in the first half of 2026. According to the December Assiom Forex survey, carried out among its associates in collaboration with Il Sole 24 Ore Radiocor, the number of traders who expect lists to rise between January and June has more than doubled: 55% (compared to 25% in November) expect positive swings (between +3% and +10%) and 3% (from 1% in the previous month) indicate strong rises (over +10%). At the same time, the number of traders who see a fall in the stock markets has more than halved to 13%, compared to 29% in the previous survey. Also down sharply, from 45% to 29%, is the percentage of those who expect markets to come to a standstill. "The December Assiom Forex survey shows a marked improvement in sentiment on stock market performance over the next six months," commented Massimo Mocio, president of Assiom Forex. "There is a significant reduction - also due to the optimism typical of the beginning of the year - in the share of those who foresee stable markets and those who fear a downturn, both in favour of more constructive expectations".
Two interest rate cuts expected from Fed
The majority of Assiom Forex traders share the market's expectations on the Federal Reserve's next monetary policy moves. According to 70% of respondents, the US central bank will make two cuts of 25 basis points (each) during 2026. In contrast, 17% expect only one intervention, while assumptions of unchanged rates (4%) or a reduction of more than 50 basis points in the year (9%) remain marginal. "In December, the Federal Reserve cut rates for the third consecutive meeting, signalling a move of monetary policy closer to neutrality," says Mocio. "The majority of respondents shared the expectations implied by the futures, which indicate two further 25 basis point cuts in 2026."
Awaiting Stability Phase for the Euro/Dollar
In the first six months of the year, the euro is expected to remain stable against the dollar. 82% of respondents (in line with 85% in the November survey) believe that the exchange rate between the single currency and the dollar will not fall from its current values. More specifically, 46% of respondents expect the euro to remain stable in the first half of the year, up from 56% in the previous month. At the same time, the share of those expecting an appreciation of the single currency rose to 36% from 29% in November. The share of those expecting a weakening of the euro remained almost unchanged (18% compared to 15%). "In December, the euro strengthened slightly, fluctuating between 1.161 and 1.179," says Mocio, noting that "expectations still remain cautious".
Spreads below 100 points in the first semester
Expectations for the spread between Btp and Bund in the first part of the new year remain positive. 90% of Assiom Forex traders forecast a spread between 50 and 100 basis points over the next six months. This percentage is up from 73% of those surveyed in November. In addition, the share of those who indicate a spread between Italian and German government bonds of between 100 and 150 points falls to 10% (from 26%). No one believes that the spread will rise above 150 pbs. "Against a backdrop of stable rates in Europe, the BTP-Bund spread touched its lowest level since 2008, dropping slightly below 70 basis points from 115 at the beginning of 2025," emphasises President Mocio, adding that "the reduced Treasury issuance activity in December supported Italian debt".
