(CTN News) – Following the release of fresh data on Monday showing a further decline in eurozone inflation, European stock markets rose, stoking traders’ hopes for a pause in interest rate hikes by the European Central Bank.
A further slowdown in US inflation stoked optimism that the Federal Reserve will not have to raise interest rates further, as detailed in the details. Asian stocks closed higher, echoing a pre-weekend rally on Wall Street.
According to AFP, the gains were boosted by China’s pledge to boost its stuttering economy.
In addition to strong corporate earnings announcements, Apple and Amazon are due to release their latest earnings reports on Thursday, suggesting that higher interest rates have not adversely affected the economy.
Laith Khalaf, head of investment analysis at AJ Bell, commented, “The outlook for economic growth is front and center for markets this week as a series of data releases will influence central bank monetary policy.”
Three data points on Tuesday, Thursday, and Friday will cover the health of the US jobs market, which has remained solid despite rising interest rates.
The eurozone economy grew 0.3% in the second quarter, while inflation eased to 5.3% in July from 5.5% in June.
The statement by Christine Lagarde on Sunday that “we are approaching our inflation target” could raise expectations of a pause in ECB rate increases.
Inflation is expected to fall substantially by the end of the year, according to Bert Colijn, a senior economist at ING.
With inflation at nearly 8% in the UK, the Bank of England is on course to raise interest rates once again on Thursday.
In the United States, Wall Street charged higher Friday after data showed the Fed’s preferred inflation gauge dropped to its slowest rate in two years last month.
As the world’s largest economy remains in rude health, the Fed indicated it might be nearing the end of its tightening cycle by raising rates again last week.
Days after announcing a number of initiatives for the light industry, the Chinese government announced fresh measures to boost consumption.
China’s army of consumers remains subdued in their spending even after strict Covid containment measures were lifted late last year.
According to a new round of figures, manufacturing activity continued to decline in July, although at a slightly slower rate than in June.
Over the past week, markets have been buoyed by hopes of a government push to jump-start the economy, even though some observers warn that large-scale measures are unlikely to be implemented.