Stock exchanges, traders more confident but Gulf war has significant impact on economic recovery

(Il Sole 24 Ore Radiocor) - The confidence of financial market participants improved in April. After two months of war in Iran, which undermined market sentiment, there are more signs of optimism thanks to the solidity of corporate earnings. This is what emerges from the survey conducted by Assiom Forex among its members, in collaboration with Il Sole 24 Ore Radiocor. In April, the share of traders who expect stable markets in the next six months became the majority, rising to 43% (from 30% in the previous survey in March). The proportion of those expecting stock markets to rise is also on the rise (from 23% to 34%), while the proportion expecting them to fall is falling, down to 23% (from 47%). Overall, 77% (from 53%) of respondents believe that stock markets will not fall from their current levels in the next six months. This percentage had plummeted to 53% in the previous survey in March, after the US and Israeli attack on Tehran. "The April Assiom Forex survey shows a recovery in investor confidence after the caution of March, linked to geopolitical tensions in the Middle East, also thanks to the solid results of the first quarterly reports," commented Massimo Mocio, president of Assiom Forex.

A stabilisation phase is expected for the euro-dollar exchange rate over the next six months. The majority of respondents(51%) indicate that the current strength between the two currencies will be maintained, while the share of those predicting a depreciation of the single currency fell to 18% (down from 29% in March). 31% see the euro/dollar cross rising (up from 29% in the previous month) "In the currency market, in April the euro/dollar exchange rate moved in a narrow range, with the cross in the 1.17 area (from 1.155 at the beginning of the month)," Mocio explained. 'For the next six months, expectations of the euro's stability against the dollar prevail, up from the previous month, while expectations of its depreciation are falling and a third of respondents expect it to strengthen'.

The majority of Assiom Forex traders expect a 'significant impact' of the Middle East conflict on the Italian economy. In light of the alarm raised by the International Monetary Fund and leading economic institutes, which predict different impacts on global growth depending on the duration of the war in the Gulf, 59% of traders believe that the energy shock linked to the conflict in the Middle East may have affected economic performance in 2026, to the extent that Italy's recovery will be delayed until next year. A third of those surveyed, on the other hand, expect the impact to be limited and manageable with slight growth in Italy's GDP in 2026. Only a minority (10%) expects a severe impact risking stagnation or recession.

Confidence also prevails on the development of the spread between Btp and Bund in the coming months. According to the survey, 64% of respondents expect a stable spread (between 50 and 100) points until the end of the summer. This percentage had plummeted to 36% in the previous survey in March (from 85% in February, pre-Iran conflict). Consequently, the number of respondents indicating a range between 100 and 150 points decreased: from 57% to 33%. Only 3% (from 7%) see an increase above the spread above 150.