It's the last session of the week before the Good Friday bank holiday, and the mood on stock markets is a little gloomy after a fiery March. Fears of an economic slowdown are taking precedence over hopes of an easing of monetary policy.

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Equity markets were mostly down yesterday, especially in the US where concerns about a hard landing overtook hopes of a future rate cut. Hopes of a best-case scenario have been somewhat overshadowed in recent days by headwinds, but it takes more than that to debunk investors' incorrigible optimism. 

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Oil prices rose by about 6% yesterday after the OPEC+ cartel announced an unexpected production cut. Commodities outperformed. The mood was dampened by the release of the ISM manufacturing index, which showed that the US manufacturing sector contracted in March for the fifth straight month, and came in below expectations at 46.3.

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As we await the release of US March employment figures later this week, an important determinant of the Fed's monetary policy, Monday's session is marked by a surprise decision by OPEC+ on its oil production. The first quarter of 2023 is rather positive for equity markets, a sign that risk appetite is back after the turmoil of 2022.

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Inflation shows signs of cooling in the US and Europe, which is boosting indices all over the world. In premarket trading, the Dow Jones and the S&P 500 were up 0.3%, while the Nasdaq inched up 0.1%, after the release of reassuring inflation data.

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The Nasdaq has taken off again on Wall Street after two sessions of hesitation. Investors are increasingly willing to ease rates, believing that this is the best way to respond to the banking crisis. And so much for price rises. Inflation data will however dominate the end of the week, with a first estimate for Germany in March today, before US PCE inflation tomorrow.

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It is difficult to find a direction for equity markets at the moment. Traditional benchmarks are blurred and there are conflicting signals. The good news is that the worries about the health of the banking sector have eased, although they have not completely gone away. 

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Easing fears about contagion in the banking sector allowed the financial sector to get out of the rut while pushing down safe havens. The bond market has rallied slightly, much to the detriment of tech stocks. 

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While worries about the banking sector linger, the US stock market remains resilient. The financial sector's setbacks are, in the opinion of most investors, the signal for a forced return to a favorable monetary policy. A bold gamble that benefits certain risky assets.

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Wall Street resumed its upward trend yesterday, with the only thing on the mind of investors being a future easing of monetary policy. But that's not stopping banks from wobbling, with fears over Deutsche Bank in particular. 

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