European stocks climb amidst future rate hikes from the Fed
Stocks climbed in Europe on Monday, despite an Asian session without clear direction, while US contracts point to a firmer open. Treasuries slid, alongside the Japanese Yen and gold as rotation to riskier assets continues, at least in the very short-term. However, on a broader picture, most stock indices are still trading sideways inside a tight trading range since mid-March as concerns related to both the war in Ukraine as well as the prospect of tighter monetary policies linger. The market is priced for further rate hikes from the Fed this year, while EU investors also expect the ECB to move to a hawkish stance relatively soon, with mounting concerns this could trigger an economic slowdown or even recession in some areas. In addition, uncertainty is also growing in China as the nation faces a dangerous virus resurgence which tends to weigh market sentiment down towards oil and energy linked shares. The current short-term consolidation is at the centre of many investors’ mind at the moment as most of them wonder if this is just a pause before reaching new highs or just the beginning of another bearish leg.
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