LONDON — European stocks traded higher Monday as global investors focus on this week’s upcoming Federal Reserve meeting.
The pan-European Stoxx 600 climbed 0.7% in early trade, with travel and leisure stocks jumping 2.4% to lead gains as all sectors and major bourses entered positive territory.
European markets are starting the week on a positive note ahead of this week’s Federal Reserve meeting stateside, bucking a more mixed trend in Asia-Pacific markets on Monday.
The Federal Open Market Committee is due to meet on March 16 and 17 and some analysts expect the U.S. central bank to revise up its GDP forecast, following a $1.9 trillion fiscal stimulus package that will send direct payments of up to $1,400 to most Americans.
The FOMC following Tuesday and Wednesday’s Federal Open Market Committee meeting will also deliver its decision on interest rates. The bond market will likely take its cues from the Federal Reserve in the coming week.
Bond pros are also watching to see whether Fed officials will tweak their interest rate outlook, which now does not include any rate hikes through 2023.
U.S. stock futures moved higher in overnight trading and pointed to gains at the open on Monday, continuing last week’s rally that led the Dow and S&P 500 to record highs.
The coronavirus pandemic continues to cause concern. White House Chief Medical Advisor Dr. Anthony Fauci warned state leaders on Sunday that the nation’s battle with the coronavirus is still “not in the end zone,” and urged Americans to adhere to public health measures as Europeans experience new infection spikes.
In Europe, the Netherlands has become the latest country to suspend the use of the AstraZeneca/University of Oxford vaccine over concerns about possible side effects, despite the World Health Organization saying there is no link between the shot and an increased risk of developing blood clots.
On Friday, the head of Germany’s public health agency on Friday warned that a third wave of coronavirus infections has begun.
Danone shares climbed 4.5% to lead the Stoxx 600 in early trade after Chairman and CEO Emmanuel Faber was ousted following pressure from activist investors.
Stellantis gained 4% after Deutsche Bank started its coverage of the Peugeot-Fiat Chrysler merger with a “buy” rating.
At the bottom of the European blue chip index, Dutch bank ABN Amro slid 3% as an investigation by Dutch prosecutors was broadened, according to Reuters.
– CNBC’s Maggie Fitzgerald contributed reporting to this story.
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