European equities jumped Monday, following fresh highs in Japanese stock markets and Friday’s record close in the Nasdaq, ahead of a week brimming with central bank meetings, major economic data and corporate earnings.

Banks, industrial goods and services, tech firms and travel and leisure shares led the opening rally, each sector up nearly 1.5%.

Chip stocks have been on a roll since Taiwan Semiconductor Manufacturing (TSMC) upgraded its profit outlook last week on booming demand for high-end chips used in AI applications.

That helped send the Nikkei to a fresh 34-year peak and brought gains for January to almost 9%.

Chipmakers, including Nvidia and Advanced Micro Devices, were among the beneficiaries of the AI-driven rally.

Nasdaq futures extended their rally with gains of 0.6%, while S&P 500 futures firmed 0.3%.

Yet MSCI’s broadest index of Asia-Pacific shares outside Japan still eased 0.6%, having already taken a drubbing last week.

The index has been pressured by weakness in China’s markets , which hit five-year lows last week and sparked speculation state funds were having to support stocks.

“The wide majority of macro economic data shows we are in a recovery period but that markets have yet to price this in,” said Florian Ielpo, head of macro at Lombard Odier Investment Managers.

Rates have declined by 1.5%, which should ease costs, but growth rates remain lower than in the past 20 years, said Ielpo.

“We’ve priced in sub-priced growth at the dawn of a recovery,” Ielpo said.


The European Central Bank (ECB) meets on Thursday and is expected to hold monetary policy steady.

“A March cut still makes sense, but the pushback from ECB officials has been potent in recent days, making a June cut more likely,” said Giovanni Zanni, an economist at NatWest Markets.

Futures have priced in 40 basis points of easing by June, with a first cut in May implied at a 76% chance.

Central banks in Canada and Norway also meet this week and no change to rates is expected, though Turkey is thought likely to hike again.

In Beijing, the central bank again skipped a rate cut in its market operations on Monday and the Bank of Japan is expected to keep policy super-easy at a meeting on Tuesday.

In the U.S., Fed officials are in blackout this week ahead of the next meeting on Jan. 30-31.

Hawkish talk has scaled back the probability of a March cut from the Federal Reserve to 49%, from around 75% a couple of weeks ago.

Prospects for an early easing could be affected by data on U.S. economic growth and core inflation due later this week.

Gross domestic product is seen running at an annualized 2% pace in the fourth quarter, while the core personal consumption price index is seen slowing to an annual 3.0% in December, down from 3.2% the previous month and the lowest since early 2021, according to a Reuters poll.

Recent data has tended to surprise on the high side, one reason yields on 10-year Treasuries climbed almost 20 basis points last week to last stand at 4.13%.


That shift underpinned the dollar, which hit a five-week high on a basket of currencies. It traded flat on Monday at 103.25 while the euro was idling at $1.089 after easing 0.5% for the week.

All of this left non-yielding gold looking unattractive at $2,023 an ounce.

In the oil market, dampened global demand has offset the threat to supply from tensions in the Middle East. Brent was off 60 cents at $77.96 a barrel, while U.S. crude for January eased 25 cents to $73.16 per barrel.

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