European stocks started the week on a positive note, tracking Friday’s gains on Wall Street following cautious comments from central bankers at Jackson Hole. China’s support measures for its equities market helped lift sentiment.
The rate-sensitive technology sector led the advance in Europe after Federal Reserve Chair Jerome Powell and European Central Bank President Christine Lagarde at Jackson Hole on Friday failed to shake the outlook for interest rates. Trading volumes may be subdued throughout the day with UK markets closed for a bank holiday.
US stocks rose and Treasury yields jumped on Friday after Powell stuck to the script in his Jackson Hole speech, saying that the Fed is “prepared to raise rates further if appropriate,” even as he stressed that the central bank would “proceed carefully,” guided by economic data. Lagarde, likewise, said the ECB would set borrowing costs as high as needed to keep inflation in check but stopped short of signaling an increase at the next meeting.
“Not much was said that changed our outlook for US equities” at Jackson Hole, RBC Capital Markets strategist Lori Calvasina wrote in a note. “Equity investors have already been wrapping their heads around the idea that rates may be higher for longer, that it’s possible the Fed’s job may not be done just yet, and that they are data dependent. That message seemed reinforced Friday.”
US equity futures edged higher, while Treasury yields dipped and the dollar was steady. Among individual premarket movers, 3M Co. gained more than 4% after agreeing to pay more than $5.5 billion to resolve lawsuits related to military earplugs.
Asian benchmarks rose after Beijing reduced the levy charged on stock trades, among other measures. Chinese stocks
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