European stocks rebound sharply on dovish Fed views

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Oct 10 - European stocks rebounded sharply on Tuesday as dovish comments from U.S. Federal Reserve policymakers bolstered sentiment a day after the conflict in the Middle East sparked a rush to safe assets.

The 10-year U.S. Treasuries rallied sharply following a holiday on Monday as top-ranking Fed officials indicated that rising yields on long-term U.S. Treasury bonds, which directly influence financing costs for households and businesses, could steer the Fed from further increases in its short-term policy rate.

Data on Thursday is expected to show U.S. consumer prices cooled in September, potentially taking the pressure off the Fed to raise rates again next month. While stocks have bounced off the lows, the upcoming earnings season, economic data and the moves in oil prices will be key in determining the trajectory for markets into the year-end.

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