The Gulf Time Newspaper One of the finest business newspapers in the UAE brought to you by our professional writers and editors.
BLOOMBERG
European stocks struggled to build on the strong rebound as traders assessed hawkish comments from policy makers and disappointing data from the region’s biggest economy. Bond yields across Europe rose.
The Stoxx Europe 600 index edged higher, with energy stocks outperforming as crude oil gained. With UK markets closed for a a holiday in honour of King Charles III, trading volumes were relatively modest. The German 10-yield climbed 3 basis points.
Stocks have rallied since mid-March as better-than-feared corporate earnings outweighed broader concerns around an economic slowdown. But while the Federal Reserve has signalled that it may pause its tightening cycle, its counterpart in the euro region isn’t done yet, muddying the outlook for economic growth and corporate profits.
Meanwhile, a report showed German industrial production sank by the most in a year — raising the risk that Europe’s largest economy slipped into a winter recession. Output dropped 3.4% in March, more than the 1.5% decline economists had predicted in a Bloomberg survey. The decrease was especially pronounced in the automotive sector, according to the statistics office.
US payroll data showed hiring and worker pay gains accelerated in April in signs of labour-market resilience and inflationary pressures in the face of headwinds. The solid data has tempered fears of a US recession. The employments figures also increased speculation the Federal Reserve will keep interest rates higher for longer and potentially leave the door open to an 11th straight hike in June.
Rates on swap contracts linked to Fed meetings moved higher, to levels consistent with a stable policy rate until September, followed by at least two quarter-point cuts by year-end.
The rout in US bank shares has the S&P 500 financials index on the verge of falling back below its 2007 peak.