What’s happening: European stocks closed the week on a higher note as the European Union kicked off negotiations over a proposed fiscal stimulus.
What happened: Equity markets remained mostly choppy last week, struggling to rise further from the lows reached in March, as investors worried about the rising covid-19 numbers around the world.
Investor sentiment was boosted by the EU leaders coming back to the table to negotiate a recovery fund, although doubts remain over the progress it can make. Investors are also expecting some good news on the US-China trade front.
Why it matters: The 27 European Union leaders restarted negotiations on Friday over a €750 billion recovery stimulus to overcome the impact of the coronavirus crisis. Investors remained concerned, however, about whether the leaders will be able to sort out their differences.
Investors also worried about the rise in infections in various parts of the world, including four states in the US recording a spike in new cases amid reopening measures. On the other hand, a Chinese Center for Disease Control expert indicated that the new outbreak in Beijing was under control.
European indices trading pushed higher on Friday and ended the week with gain, with hopes of easing tensions between the US and China., as US Secretary of State Mike Pompeo and China’s foreign policy chief Yang Jiechi met in Hawaii.
Some momentum also ensued as the Bank of England added another £100 billion to its bond-buying program and the UK reported a strong 12% rise in retail sales for May. Meanwhile, Germany reported a 2.2% decline in inflation for the month.
The Stoxx Europe 600 index gained 0.56% on Friday, after falling 0.7% on Thursday. The index posted a gain of 3.2% for the week. The German DAX 30 index rose 0.4%, while the French CAC 40 closed higher by 0.42% on Friday. Both indices recorded weekly gains of 3.2% and 2.9%, respectively.
Meanwhile, London’s FTSE 100 gained 3.1% last week, after closing higher by 1.1% on Friday.
What to watch: Markets await consumer confidence data from the Eurozone and speeches by ECB members. Eurozone’s consumer confidence is expected to recover to -15 in June, from a reading of -18.8 in May. Investors will be hoping for news of the EU nations sorting out their differences and announcing a recovery fund soon.
Investors will also continue to keep an eye on coronavirus numbers, with the total cases reaching almost 9 million globally.