European shares advanced on Monday as investors brace themselves for the release of key Federal Reserve inflation data later in the week. This data is expected to hint at the trajectory of the Fed’s interest rate policy going forward.
The European Stoxx 600 rose by 0.2% to 466.29 points in Monday’s morning session, with bank and energy stocks largely driving the index’s gains.
Energy stocks gained 0.8%; aided by the rise in crude prices. Following closely behind were bank stocks, which advanced 0.6%, and healthcare stocks with a 0.5% gain.
Due Wednesday, the Federal Reserve’s inflation data is expected to show a 0.4% rise in core prices month over month. UBS Global Wealth Management’s Chief Investment Officer Mark Haefele claimed that this rise would weaken the argument for further rate cuts. “In the other direction, the Senior Loan Officer Opinion Survey is almost certain to show that large numbers of banks are tightening their lending standards,” Haefele commented.
Investors are also awaiting the release of the Fed’s Senior Loan Officer Opinion Survey, scheduled for release later on Monday. This report is set to shed light on the state of lending, thereby showing how recent banking instability in the U.S. has shifted lending.
