May 20 2024: European stock markets saw gains on Monday, buoyed by optimism over potential global monetary policy easing. By 03:10 ET (07:10 GMT), Germany’s DAX index was up 0.2%, France’s CAC 40 rose 0.1%, and the U.K.’s FTSE 100 climbed 0.2%.
Key Economic Data and Monetary Policy Expectations:
European indices started the week with modest gains, trading near record levels, ahead of the release of the latest regional economic activity data.
The euro area’s recovery appears to be progressing, and PMI data is expected to indicate expansion.
The European Central Bank is anticipated to cut interest rates in June to support economic recovery.
In the U.S., the Federal Reserve will publish the minutes of its April 30-May 1 meeting this week. Fed Chair Jerome Powell has suggested that rates might remain high due to persistent inflation.
Several Fed officials, including Atlanta Fed President Raphael Bostic and New York Fed President John Williams, are scheduled to speak this week.
Corporate Earnings:
Ryanair’s stock fell 0.9% despite reporting a 34% rise in full-year profits. The airline saw increased fuel costs but managed to raise fares by over 20%.
Ryanair could carry up to 200 million passengers this year, contingent on timely Boeing deliveries. The airline remains cautiously optimistic about summer fares and did not provide a profit forecast for the current year, citing potential adverse events.
Commodity Markets:
Crude oil prices edged higher, with U.S. crude futures (WTI) up 0.3% to $79.81 per barrel and Brent crude up 0.4% to $84.31 per barrel. This increase follows a reported helicopter crash involving Iranian President Ebrahim Raisi, adding to Middle Eastern tensions.
Gold futures rose 1.2% to $2,445.50 per ounce, and EUR/USD edged higher to 1.0872.
Overall Market Sentiment:
The market’s positive start to the week is driven by hopes of monetary policy easing and supportive measures from Beijing for its economy, particularly the property market.
China’s decision to keep its benchmark loan prime rate at record lows further supported this sentiment.
