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European Stocks Reach Highest Level Since Early 2022

Investors anticipate central banks to switch to interest rate cuts next year amid mixed market reactions.

Overview

  • Europe's benchmark STOXX 600 index rose to its highest level since February 2022, encouraged by an upbeat read of the U.S. labour market.
  • The index has rallied over 10% since October 27 as traders bet that the world's biggest central banks have finished raising interest rates and will switch to cuts early next year.
  • European markets were muted ahead of a key November jobs report from the U.S., with mining stocks dropping 0.6% while oil and gas climbed 0.5%.
  • Global attention is focused on the November nonfarm payrolls report, as investors try to gauge the likely trajectory of interest rate decisions from the Federal Reserve over the next year.
  • European shares slipped after recent gains, with data from Germany adding to worries that the industrial sector will continue to drag on the euro zone's largest economy.