LONDON — European stocks advanced on Monday as international markets gear up for key U.S. data releases, including the latest inflation reading.
The pan-European Stoxx 600 provisionally ended up 1%, with mining stocks climbing 2.7% to lead gains as most sectors and major bourses closed in positive territory.
Just Eat Takeaway shares jumped around 12% after The Times on Sunday reported that Grubhub co-founder Matt Maloney could buy back the U.S. subsidiary.
At the bottom of the European blue chip index, Swedish investment company Storskogen Group fell 7%.
“The Fed will stick to the letter of its mandate and focus on inflation at least while unemployment remains low. Thus, volatility is set to continue.”
George Lagarias
Chief Economist, Mazars Wealth Management
The positive start for European stocks came after markets closed lower on Friday after data showed the U.S. economy added 390,000 jobs in May. U.S. and European stocks slid as investors assessed the potential for rising interest rates as a result of the better-than-expected data.
“The Fed will stick to the letter of its mandate and focus on inflation at least while unemployment remains low. Thus, volatility is set to continue,” said George Lagarias, chief economist at Mazars Wealth Management.
“However, financial markets are less interested in interest rates (which take a lot of time to feed into the real economy, especially from such low levels), and more about two other factors: Quantitative Tightening (QT) and the Fed Put.”
The latest U.S. inflation reading at the end of the week will be a key focus for investors. May’s consumer price index in the U.S. is expected to be just slightly cooler than April, and some economists are expecting it could confirm that inflation has peaked.
The University of Michigan consumer sentiment index, also due Friday, will also be closely watched by investors.
U.S. stock moved broadly higher on Monday, looking to rebound after a losing week as investors continued to bet that the Federal Reserve will tighten monetary policy aggressively to combat surging inflation.
Meanwhile, shares in Asia-Pacific were mixed Monday as a private survey showed another contraction in China’s service sector activity for May.
Attention in the U.K. on Monday has also turned to domestic politics, with Prime Minister Boris Johnson facing a vote of confidence from members of his Conservative party amid growing dissatisfaction in his leadership.
