(Il Sole 24 Ore Radiocor) – Stock markets will be cautious in the coming months, in a climate of strong volatility fuelled by growing global uncertainty on several fronts. This is the sentiment of financial market participants, among whom caution has once again prevailed in the face of the unpredictability of US President Donald Trump’s policies. According to the Axiom Forex survey, conducted among its associates in collaboration with Il Sole 24 Ore Radiocor, expectations of further gains were reduced in January: in fact, the proportion of respondents indicating rising stock markets (between +3% and +10%) fell to 41%, compared with 55% in December. At the same time, the percentage of those anticipating stable markets rose significantly, from 29% to 48%. However, those traders who expect losing markets remain in the minority (from 13% to 9%). “The January Assiom Forex survey indicates a slight worsening of sentiment on the outlook for equity markets over the next six months, although it remains positive overall,” commented Massimo Mocio, president of Assiom Forex. “At the same time, also in light of the increased geopolitical uncertainty in this start of the year, the percentage of those who foresee stable markets is growing significantly, while downward expectations remain residual and in further contraction”.
Exchange rates: 39% traders bet on euro appreciation, for 29% stronger dollar
The euro/dollar is not expected to fall below current values, at least until July: 71% of respondents expect a stable or rising exchange rate between the two currencies. In detail, the proportion of those expecting an appreciation of the single currency rose slightly in January (from 36% to 39%), while the number of respondents expecting the current strength ratio to be maintained fell sharply (from 46% to 32%). This decline goes in favour of an appreciation of the greenback: a possibility indicated by 29% of respondents, up more than 10 percentage points from 17% in December. “In January, the euro/dollar remained stable overall, fluctuating in a range between 1.157 and 1.174,” Mocio explained, noting that “expectations nevertheless remain slightly tilted towards a strengthening of the euro”.
Spreads below 100 until summer
The spread between Btp and Bund will remain firmly below 100 basis points at least until summer 2026. For 89% of the respondents, in line with 90% in the December survey, the spread between Italian and German government bonds will fluctuate in the range between 50 and 100 points between January and July 2026. Nine per cent indicated a spread at 100-150, while a residual 2 per cent (which had fallen to zero in December) returned to indicate a range between 150-200 points. However, it is now since last June that a spread above 200 has not been indicated. “The BTP-Bund spread has reached its lowest level since 2008, approaching the area of 60 basis points. The resumption of Treasury issuance activity at the beginning of 2026 and the success of the first syndicated dual tranche transaction in January have helped to support the spread’s performance,’ Mocio comments, emphasising that ‘expectations remain constructive’.
Operators fear new geopolitical and trade shocks
Geopolitical and trade issues, which have fuelled a climate of growing uncertainty – including Greenland, the events in Minnesota and even the unknown of Fed independence – are once again preoccupying financial markets. 79% of Assiom Forex traders believe that the world is again fragmenting into opposing spheres of influence, with the risk of sudden developments that could heighten geopolitical tensions during 2026. A clear minority (21%) of respondents expected the trade confrontation to subside during the course of the year and saw the possibility of reaching agreements on some of the major dossiers currently open, believing that world trade was more resilient than expected.