European markets closed higher Monday after posting their steepest decline of the year so far last week.
The pan-European Stoxx 600 index provisionally closed 1.1% higher, with all sectors and major bourses in positive territory. Travel and leisure stocks led gains, up 2.4%.
Commerzbank was among the top performers, up 5% on its first day back in Germany’s blue-chip DAX index. Gains retreated slightly later in the day and shares of the bank were 4.6% higher at market close.
British Prime Minister Rishi Sunak on Monday signed a new trade deal with the European Union designed to remedy problems caused by the Northern Ireland Protocol. Sunak is due to hold a press conference with European Commission President Ursula von der Leyen later.
Sterling rose 0.9% against the U.S. dollar on the news, hitting a session high of around $1.2051.
Preliminary inflation prints will be out from France and Spain on Tuesday, Germany on Wednesday, and Italy and the euro zone on Thursday.
The European Central Bank has explicitly said it intends to hike rates by another 50 basis points in March, though investors are assessing how likely they are to move significantly beyond that.
It follows the U.S. Federal Reserve’s preferred inflation gauge showing a stronger-than-expected increase in prices, which — combined with a tight labor market and resilient consumer spending — has intensified rate hike expectations.
Asia-Pacific markets were mixed on Monday after stocks on Wall Street also posted their steepest decline of 2023.
U.S. equity futures, meanwhile, were higher.
