Multidirectional dynamics of European markets confuses investors

At the moment, European stock markets are influenced by a huge number of multidirectional and contradictory signals. This confuses investors and reduces risk appetite, forcing market participants to lie low and watch the events unfold.

European markets are between two fires: at the epicenter of increasing tension around Brexit and uncertainty about the trade conflict between the United States and China. As for the UK exit from the EU, this question causes investors' dismay. In relations between China and the United States, the situation is beginning to clear up, and in the future a positive outcome is possible, experts say. For European investors, it is important that the increased import duties on Chinese goods can be abolished. This gives a positive signal for European markets, analysts emphasize.

Another important benchmark for European trading platforms is oil prices, which change unpredictably and in different directions. In the medium term, the decision of OPEC + to reduce production volumes was a positive factor for European markets. Due to this, the fears of market participants regarding the possible oversupply of black gold are significantly reduced.

The attention of participants in European stock markets is directed to the upcoming economic forum in Davos, which starts on Tuesday, January 22, and ends on Friday, January 25. Note that the forum will not be attended by US President Donald Trump and the leader of France Emmanuel Macron. The event will also not be the Russian President Vladimir Putin.

Despite the absence of many prominent politicians on the forum, a number of important issues are scheduled to be considered. One of the main topics for discussion will be oil prices and the general state of the world market.

Experts believe that the problem of global trade, in particular, the US-Chinese trade conflict, is another important topic of the forum. According to experts, the confrontation between these two countries significantly affects the entire global economy. The key theme of the event remains "Globalization 4.0: shaping the global architecture in the era of the fourth industrial revolution". Analysts remind that at the moment, the policy of protectionism and a departure from globalization has been taken, although quite recently leading politicians have been active supporters of global universalism.

An important topic of discussion at the forum in Davos will be the situation in the financial markets. At the end of last year, they were shocked by the collapse, partly analogous to the 2008 crisis. It is expected that an exit strategy will be developed taking into account past mistakes. However, experts are not sure that the forum participants will be able to fully assess all the risks of the world economy and draw the right conclusions, although they are counting on improving the situation.