European stock indexes opened slightly higher on Monday as investors focused on the outlook for interest rates ahead of a busy week of central bank meetings and economic data.
At 0834 GMT, the MSCI World Equity Index was little changed, up 0.3 per cent on the day but still near its lowest since late March . The market is looking for “confirmation of the peak rate policy by central banks and any indication that might lead to thinking that perhaps central banks will be in a position to cut by the middle of next year,” said Samy Chaar, chief economist at Lombard Odier.
Investors are betting that rates in the region will stay persistently high, although new data showed inflation in Germany is falling. The U.S. dollar index was steady, at about 106.650, and the euro was down by less than 0.1 per cent at US$1.0556.Risk appetite was dulled to some extent by Israel’s push to surround Gaza’s main city in a self-declared “second phase” of a three-week war against Iranian-backed Hamas militants. But analysts said this was just one of a number of factors affecting sentiment.