European markets are mixed so far this morning, following the Easter bank holiday. The FTSE All-Share is up about a quarter of a percent this morning, while most major indices on the continent are trading lower. Last week, which was generally positive for global risk appetite, European Central Bank officials expressed doubts over the bloc’s ability to rebound economically in the second half of the year.

Before Easter, investor bullishness had been boosted by evidence that China’s stimulus was working. It was revealed that Chinese GDP growth was ahead of expectations in the first quarter, holding steady at an annualised 6.4%.

Stocks have also been supported recently by a surprisingly strong start to the first quarter US earnings season. Combined forces lifted the S&P 500 near its all-time high last week, before pulling back slightly. US manufacturing data arrived below economists’ expectations, failing to show a rebound from the relatively weak winter months. March’s Purchasing Managers’ Index read 52.4, the same as February’s.

In the UK, Consumer Price Index growth in March was 1.9% compared to the same time last year. It means that the average inflation rate for the first quarter was the lowest of any quarter since 2016, which is a boost for disposable household income given that wage growth is at 3.5%. Meanwhile, Brexit is expected to return to the spotlight this week as cross-party talks resume after the Easter break.  

Oil prices have been boosted by Donald Trump’s announcement that Iranian sanctions waivers would end by May, meaning there will be no more exemptions for countries still buying oil from Iran. This, combined with other geopolitical uncertainty in oil-producing nations and OPEC’s supply cuts, has driven oil prices to 2019 highs.

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