# European stocks hit six-week high on hopes for rate hike slowdown
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-11-01
Category: FINANCE
Category URL: https://financedigest.com/category/finance
Meta Title: European Stocks Rise Amid Rate-Hike Speculation
Meta Description: Stay up-to-date on the latest market developments as European stocks climb, supported by optimism around central banks and upcoming rate decisions.
URL: https://financedigest.com/european-stocks-hit-six-week-high-on-hopes-for-rate-hike-slowdownhtml

![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2022-11-01t095140z1lynxmpeia017mrtroptp4europe-stocks-1736814940102-compressed.jpg)

By Elizabeth Howcroft

LONDON (Reuters) -European stocks rose on Tuesday and the positive market sentiment was set to continue on Wall Street, supported by speculation among investors that central banks could come to the end of their rate-hiking cycles.

Following mild losses on Wall Street on Monday, Asian shares strengthened on Tuesday and European shares opened higher, as investor focus shifted to the U.S. Federal Reserve’s [rate decision on Wednesday and the Bank](https://www.financedigest.com/instant-view-ecb-sticks-with-big-rate-hike-even-as-bank-fears-roil-markets.html "Instant View: ECB sticks with big rate hike even as bank fears roil markets") of England meeting on Thursday.

At 1153 GMT, the MSCI world equity index, which tracks [shares in 47 countries](https://www.financedigest.com/netflix-cuts-prices-in-some-countries-to-boost-subscriptions-shares-drop.html "Netflix cuts prices in some countries to boost subscriptions, shares drop"), was up 0.7% on the day, holding close to last week’s high.

[Europe’s STOXX](https://www.financedigest.com/telecom-italia-tops-europes-stoxx-600-amid-spiking-covid-19-cases.html "Telecom Italia tops Europe’s STOXX 600 amid spiking COVID-19 cases") 600 rose to its highest in more than six weeks, up 1.2% on the day.

[London’s FTSE](https://www.financedigest.com/londons-ftse-100-hits-fresh-record-high-as-telecoms-surge.html "London’s FTSE 100 hits fresh record high as telecoms surge") 100 was up 1.4%, while Germany’s DAX was up 1.3% .

British [energy giant BP made $8.15 billion](https://www.financedigest.com/petrofac-hitachi-energy-receive-14-billion-agreement-from-tennet.html "Petrofac, Hitachi Energy receive billion agreement from TenneT") in third quarter profit, more than double what it made in the same period last year. Rivals Shell, Exxon [Mobil and TotalEnergies also reported bumper profits](https://www.financedigest.com/deutsche-telekom-lifts-profit-view-aims-for-t-mobile-majority-soon.html "Deutsche Telekom lifts profit view, aims for T-Mobile majority soon") last week.

U.S. stock futures rose, with Nasdaq e-minis up 1.2% and S&P 500 e-minis up 0.9%.

Norman Villamin, chief investment officer of [Wealth Management](https://www.financedigest.com/wealth-management-consultant.html "Wealth management consultant") at UBP, said the rise in European stocks could be due to “effectively dovish” guidance from the European Central Bank last week.

“While that’s positive I would caution people. To us that just means that the recession is a little less deep than it may otherwise have been, but we do think that a recession is [coming in Europe,”](https://www.financedigest.com/money-20-20-europe-how-far-have-we-come.html "Money 20/20 Europe – how far have we come?") he said.

Although last week’s ECB meeting was perceived by markets as containing dovish signals, ECB President Christine Lagarde said in an interview on Tuesday that the [central bank must keep raising interest rates](https://www.financedigest.com/central-banks-keep-hiking-rates-amid-banking-turmoil.html "Central banks keep hiking rates amid banking turmoil") to fight off inflation, even if the probability of a euro zone recession has increased.

[Data on Monday showed that euro zone inflation](https://www.financedigest.com/european-shares-rise-as-us-inflation-data-signals-end-of-rate-hike-cycle.html "European shares rise as US inflation data signals end of rate-hike cycle") surged by more than expected in October, hitting 10.7%.

[RATE HIKES](https://www.financedigest.com/wall-street-slips-dollar-gains-as-fed-seen-hiking-rates-in-may.html "Wall Street slips, dollar gains as Fed seen hiking rates in May")

The Fed is expected to [raise interest rates by 75 basis points](https://www.financedigest.com/how-to-raise-my-credit-score-40-points-fast.html "How to raise my credit score 40 points fast") on Wednesday, but investors will look for any signals the Fed may be considering a deceleration in interest rate hikes in the future.

Villamin said that [central banks](https://www.financedigest.com/central-banks-hike-rates-again-but-a-pause-is-coming.html "Central banks hike rates again, but a pause is coming") are caught in a “tug of war” between the slowing economy and high inflation.

“In the U.S., because the economy is still doing pretty well, there’s not very many shocks, we think ongoing [rate hikes](https://www.financedigest.com/stocks-falter-as-economic-worries-nag-nz-delivers-big-rate-hike.html "Stocks falter as economic worries nag, NZ delivers big rate hike") make a lot of sense in the first half of next year,” he said.

[Euro zone](https://www.financedigest.com/euro-zone-economic-sentiment-rises-in-january-to-seven-month-high.html "Euro zone economic sentiment rises in January to seven-month high") government bond yields fell. The [German 10-year yield](https://www.financedigest.com/german-yields-steady-spreads-tighten-after-recent-repricing.html "German yields steady, spreads tighten after recent repricing") was down 11 basis points on the day at 2.048%.

U.S. [Treasury yields](https://www.financedigest.com/wall-st-flutters-treasury-yields-ease-as-powell-resumes-testimony.html "Wall St flutters, Treasury yields ease as Powell resumes testimony") also fell, with the 10-year yield down 13 bps at 3.9468%, and the two-year yield down 7 bps at 4.4266%.

The U.S. [dollar index](https://www.financedigest.com/dollar-index-jumps-after-u-s-retail-sales-show-surprise-rebound.html "Dollar index jumps after U.S. retail sales show surprise rebound") was down 0.7% at 110.8, while the euro was up 0.6% at $0.99405.

The [Australian dollar](https://www.financedigest.com/asian-stocks-make-7-month-highs-australian-dollar-gains-on-hot-inflation.html "Asian stocks make 7-month highs, Australian dollar gains on hot inflation") was up 0.8% at $0.6451. The Reserve Bank of Australia raised rates by 25 bps for a second month running, but revised up its inflation outlook and said more [rate hikes](https://www.financedigest.com/dollar-hits-one-month-high-against-yen-as-traders-bet-on-fed-rate-hike.html "Dollar hits one-month high against yen as traders bet on Fed rate hike") would be needed.

The [Japanese yen](https://www.financedigest.com/japanese-yen-gains-as-ueda-set-to-be-named-next-boj-governor.html "Japanese yen gains as Ueda set to be named next BOJ governor") was a touch stronger versus the dollar, with the pair at 147.28.

China’s yuan [hit a near 15-year low against the dollar](https://www.financedigest.com/pound-hits-10-month-peak-euro-up-as-dollar-under-pressure.html "Pound hits 10-month peak, euro up as dollar under pressure"), after the central bank fixed the official guidance rate at its lowest level since the global financial crisis of 2008.

[Oil prices](https://www.financedigest.com/shares-fall-with-oil-prices-amid-concerns-about-u-s-fed-rate-hikes.html "Shares fall with oil prices amid concerns about U.S. Fed rate hikes") rose by more than 1%, paring losses from the previous session, helped by the weaker dollar.

Gold also rose, up 1.2% $1,652.38 per ounce.

(Reporting by Elizabeth Howcroft, Editing by Ed Osmond and Chizu Nomiyama)


---
This blog is powered by Superblog. Visit https://superblog.ai to know more.
---