European stocks see modest gains at the start of the week
Risk appetite supports the rise of the US dollar
On the calendar, Markets tune in for the US ISM services PMI
The USD back on track on a positive start of the week
Saudi Arabia voluntarily reduces oil production once again
European stocks open with modest gains
reflecting a broader global recovery driven by positive developments such as the agreement to raise the US debt ceiling. Moreover, the energy sector received a boost as Saudi Arabia voluntarily decided to reduce its oil production. This contributed to the overall positive sentiment in the market.
The FTSE 100 index rose 0.5% to 7,645.44 points from Friday's closing level, while the DAX index rose 0.3% to 16,092.63 points and the French CAC index rose 0.1% to 7,278.65 points.
Oil and gas stocks led gains, rising 1.1% after Saudi Arabia announced voluntary production cuts starting from July. OPEC+ announced on Sunday that it would not make any changes to the planned oil production cuts for the rest of the year. Travel and leisure stocks fell into negative territory, declining by 0.5%, followed by the retail trade, which fell by 0.4%.
The dollar rises with improved risk appetite
The US dollar rose significantly against most major currencies during today’s trading, as investors' risk appetite improved following the agreement to raise the US debt ceiling. This comes as markets prepare for the Federal Reserve to raise interest rates at its next meeting, with continued improvement in economic data.
Last Friday's data showed growth in the labor market sector despite the challenges it faces, which helped to return expectations of a 25 basis point interest rate hike in the bank's meeting next week, as the Federal Reserve continues to try to control inflation.
Meanwhile markets wait on the release of the US service Purchasing Managers' Index (PMI) data. Most forecasts anticipate an upward movement in the index for the sector, projecting an increase from 51.9 to 52.6 points. =