Casper Hedberg | Bloomberg | Getty Images
LONDON – European stocks were cautiously higher on Tuesday amid lingering uncertainty over the prospect of interest rate cuts.
Pan-European Stoke 600 The index was up 0.15% in early trading, with sectors and major exchanges trading mixed. Technology stocks rose 1.28%, while oil and gas stocks fell 1.2%.
Shares of Danish biotech company Zealand Pharma rose 4%, recovering from the previous day’s losses, after CEO Adam Steensberg took over. Tell Reuters reported last week that the company was looking for a major pharmaceutical partner to help bring its weight-loss drug to market.
According to central bank news, the Riksbank cut interest rates by 25 basis points from 3.75% to 3.50% and hinted that it will cut interest rates two to three more times this year.
Jens Magnusson, chief economist at financial services group SEB, said the central bank may seek guidance from the Federal Reserve on the pace of policy easing.
“They don’t want the spread to get too big,” he told CNBC. “If the Fed continues to adopt more hawkish policies, the Riksbank will not be able to move at full speed.”
Global markets will now focus on key events from the Federal Reserve this week. Minutes of the Fed’s latest meeting will be released on Wednesday, and Fed Chairman Powell will deliver a speech in Jackson Hole, Wyoming on Friday.
Both events could give investors a clearer picture of the prospects for rate cuts and expectations for the next Fed meeting. According to Fed futures fund pricing, the probability that central bank policymakers will cut interest rates by 25 basis points in September is about 76% CME Group Fed Watch Tool.
Asia-Pacific markets were mostly higher on Tuesday, tracking gains on Wall Street on Monday, while investors also assessed minutes from the Reserve Bank of Australia’s latest meeting. U.S. stock index futures were flat overnight after the S&P 500 and Nasdaq posted their longest winning streak into 2024.
Data released in Europe on Tuesday include German producer price index and EU final year-on-year inflation rate.
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