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27/05/24
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European Shares Close Higher in Thin Holiday Trading
On Monday, stocks in Europe closed slightly up and government bond yields dropped, amidst indications of upcoming interest rate cuts by the ECB, although trading was light as several key global markets were closed.
The STOXX 600 pan-European index closed 0.3% up, very close to the all-time high reached earlier in the month.
According to key policymakers at the ECB, the bank has room to reduce interest rates as inflation eases but must be cautious in easing policy, even if the direction of inflation is already clear.
Government bond yields across Europe dropped, with the yield of the benchmark 10-year bund standing at about 2.547%.
The focus this week will be on May’s reading of consumer prices for the eurozone due to be released on Friday, while inflation readings from France, Spain, and Germany will also be released during the week.
According to LSEG data, the ECB will likely start cutting interest rates at its meeting next week, with bets showing a more than 90% chance of a rate cut.
U.S. inflation data is also due on Friday and may help traders evaluate the numbers and timing of possible rate cuts this year by the Fed.
Trading was light as markets in the U.S. and UK were closed for a public holiday.
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