On Monday, European stock markets rose slightly, led by the STOXX 600 index which increased by 0.3%.
Banks and insurance companies performed especially well, helping Spain’s stock market take the lead in the region. Investors are currently waiting for new data on industrial production and several company profit reports coming later this week from major firms like Airbus and Orange.
These reports will help people understand how healthy European businesses really are right now.
The market has been on a bit of a roller coaster recently. In late January, investors were worried that new Artificial Intelligence (AI) tools might hurt the profits of traditional companies, causing stock prices to swing up and down.
However, European companies actually reported better profits than people expected, even with the challenge of high US tariffs. This resilience helped the market hit a record high last week, marking three straight weeks of growth.
Later today, a new report is expected to show that industrial production in Europe grew by 1.3% in December. While this is slower than the growth seen the month before, investors are still hopeful.
Many believe that government spending and support programs are starting to help the industrial sector recover and grow again.
On the FX front, the Japanese yen dropped slightly after a massive 3% surge last week. This small decline happened because new economic data showed that Japan’s economy grew much slower than expected, making it less likely that the Bank of Japan will raise interest rates soon.
Meanwhile, the US dollar remained steady as investors processed recent reports showing that inflation is cooling down, which supports the idea that the Federal Reserve might cut interest rates later this year.
Trading was very quiet across the board because major markets in the U.S., China, Taiwan, and South Korea were closed for public holidays. With fewer people trading, the euro and the British pound didn’t move much against the dollar.
In other currency news, the Australian dollar rose slightly, staying near its highest level in three years due to expectations that Australia might actually raise interest rates soon.
On the other hand, the New Zealand dollar weakened a bit as investors prepared for a central bank meeting on Wednesday, where experts widely expect interest rates in that country to stay exactly where they are.
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