Investors in the Spanish stock market opted for caution at Monday's opening ahead of an emotionally charged week on the monetary front, although the Ibex-35 posted a timid advance that allowed it to stand at its highest level since August 2017.

The Spanish stock index up 6% in the time to March, supported by the resurgence of hopes for rapid interest rate cuts.

However, these expectations have received a cold shower in recent days, given the persistence of inflation, so the markets will be particularly attentive to the numerous central bank meetings this week, and especially those of the Bank of Japan (Tuesday), Federal Reserve (Fed) of the United States (Wednesday) and Bank of England (Thursday).

The main course of the week will be the Fed meeting, where analysts expect no change in interest rates and all attention will be on the horizon of future decisions.

In particular, Renta 4 highlights the interest in the update of the macroeconomic forecast table and the "dot plot", a dot plot reflecting where Fed members (anonymously) expect interest rates to be in the coming years.

"(...) we do not rule out that (the dot plot) will be tightened to show fewer rate cuts in 2024, only 2 versus the 3 targeted in December," it said in a daily report.

"The reason: that part of the 11 Fed members who in December were aiming for 3 cuts (versus 8 who opted for 2), could moderate their expectations of rate cuts to 2 after the strength seen in the latest inflation and employment data," these analysts added, noting that "if the dot plot is adjusted to only 2 cuts, the market would also need to adjust its expectations, which currently stand at 3 cuts for 2024."

Currently market bets for the U.S. central bank point to a first cut in the cost of debt in June, although--according to interest rate futures on LSEG's IRPR tool--the odds have fallen to 58%, well below the percentages being bandied about in early February. The expected year-end rate level is 4.6%, down from 5.25-5.50% now, according to IRPR.

In addition, several important indicators will be published during the week, including the final Eurozone consumer price index (Monday), the PMI business surveys (Thursday), and the ZEW (Tuesday) and IFO (Friday) indices of confidence in the German economy.

On Monday, positive macroeconomic data were released from China, although the optimism was clouded by the drag from the real estate sector and fears that the good performance of these indicators will mean little state aid measures for the economy.

At 08:10 GMT on Monday, Spain's selective Ibex-35 stock market index was up 17.40 points, or 0.16%, to 10,615.30 points, which if held at the end of the session would be its highest closing level since August 7, 2017, while the FTSE Eurofirst 300 index of large European stocks advanced 0.07%.

In the banking sector, Santander lost 0.15%, BBVA scored 0.67%, Caixabank advanced 0.42%, Sabadell gained 0.62%, Bankinter appreciated 0.12% and Unicaja Banco rose 0.39%.

Among the large non-financial stocks, Telefónica gained 0.28%, Inditex gave up 0.02%, Iberdrola lost 0.09%, Cellnex gained 0.12%, and the oil company Repsol rose 1.13%.

(Information by Tomás Cobos)