Activity returns to Europe after the Easter break, and European investors manage to calm the nervousness seen yesterday on Wall Street due to President Donald Trump's behavior. The U.S. market fell sharply on Monday, with the main indices and especially the technology sector dropping by over 2.5%. The excuse for selling this time was a new attack by the White House on Federal Reserve Chairman Jerome Powell.
Trump wants him to leave and repeats it whenever he can, with insults and threats that he will be the one to fire him, something unprecedented in the U.S. as there are no precedents and, in principle, would be impossible considering that the central bank is independent. The U.S. President wants the Fed to lower interest rates to stimulate an economy that is heading towards a recession in the second half of the year, mainly due to the measures announced by the Republican in just three months in office. The next meeting of the Federal Reserve's FOMC (Federal Open Market Committee) will take place on May 6 and 7.
Doubts about the future of the U.S. economy continue to be reflected in the weakness shown by the dollar against other currencies. Against the euro, it has reached a four-year high at 1.15.
With this volatile situation that invites, at the very least, nervousness, European stock markets - which were experiencing significant drops in futures - have opened with some calm and a mixed tone, following the lead of Asia, where the Nikkei index of the Tokyo Stock Exchange fell by 0.3% in the session. Thus, the Ibex falls by 0.7% at the opening on Tuesday to 12,847 points; while in Europe, there have been mild declines such as in the EuroStoxx 50, which is down by 0.2%, as well as the German DAX. On the contrary, there are increases in the London Stock Exchange by 0.2% in the early stages. And where is Wall Street heading? Futures point to an opening on the rise.
Investors are also continuing to sell American debt. This was clearly seen yesterday during the session when the yield on the U.S. 10-year bond rose from 4.3% to 4.44%. Today, there is a short-term debt auction in Spain. The Treasury aims to place 3 billion euros in 3- and 9-month Treasury bills in what will be the last auction of April and the first after the European Central Bank (ECB) announced last week a new interest rate cut to 2.25% for the deposit facility and 2.4% for the refinancing rate.