Europe’s biggest banks will report their second-quarter earnings this week, with all eyes on whether the gains from higher interest rates have stabilized and whether recent political events are affecting sentiment. Stocks are expected to open higher following the news that U.S. President Joe Biden has dropped out of the U.S. presidential race.
The European Central Bank is expected to cut interest rates for a second time in September, but so far, banks’ earnings have proved surprisingly robust, boosting their shares.
Also, China surprised markets by lowering key short-term policy rates and its benchmark lending rates on Monday in an effort to stimulate growth in the world’s second-largest economy.
The country is verging on deflation and faces a prolonged property crisis, surging debt, and weak consumer and business sentiment. Trade tensions are escalating as global leaders are concerned over grow China’s export dominance.
Oil prices rose in early trade on Monday as investors anticipated a potential rate-cut cycle that could begin as soon as September.
