The Tribune

By CHRIS ILLING

Week in review In the US, the Dow Jones and Nasdaq climbed on Friday and were at their highest level for four weeks. The European indices were also continuing their recovery. The losses since the collapse of Silicon Valley Bank, which started the global banking industry’s problems, are almost balanced.

The most recent wave of recovery was driven by hopes that the world’s central banks will be less tough on inflation in the future. The slight fall in inflation in the euro zone is bolstering hopes that central banks will slow down a little when raising interest rates. In March, consumer prices rose by just 6.9 percent year-on-year.

But despite the decline in inflation, there can be no talk of the all-clear signal. The core inflation rate, which excludes volatile energy and food prices, as well as alcohol and tobacco, continued to rise in March to a record 5.7 percent. In February, core inflation was still 5.6 percent.

Inflation is increasingly affecting the services sector, above all the hotel and restaurant industries, plus the tourism and events segment. The European Central Bank (ECB), which is aiming for 2 percent inflation as the ideal value for the euro zone, has raised interest rates six times in a row since July 2022 to help curb the sustained rise in prices, most recently by 0.5 percentage points in mid-March.

Asia’s major stock exchanges rose as well during the final trading day last week. In Tokyo, the leading Japanese index, the Nikkei 225, rose 0.9 percent. The CSI index, which includes the 300 most important stocks on the Shanghai and Shenzhen stock exchanges, gained 0.2 percent.

Another sector which had a positive week were the digital currencies. Ongoing concerns about the stability of the banking sector are driving investors into Bitcoin. The cyber currency was last at $28,553. According to industry experts, investors have recently fled to investment alternatives such as Bitcoin to park liquidity. Since the collapse of the Silicon Valley Bank (SNB) three weeks ago, Bitcoin has gained almost 40 percent.

Oil prices initially barely moved last week. Trading on the crude oil market has been quiet recently. The fact that the banking turmoil in the US and Europe has calmed down somewhat is causing prices to tend to rise. The corresponding economic risks have not increased at least.