European Stocks Gain After US Debt Deal
European stocks rose on Monday, May 29th, 2023, after the United States and the United Kingdom reached a debt deal. The UK market was closed due to a public holiday.
European Markets
The Stoxx Europe 600 Index rose 0.4%, while the Euro Stoxx 50 Index gained 0.5%. The German DAX Index rose 0.3%, while the French CAC 40 Index increased 0.4%. The FTSE MIB Index in Italy rose 0.7%.
US-UK Debt Deal
The US and UK reached a debt deal on Sunday, May 28th, 2023, that would allow the US to recoup some of the money it is owed by the UK. The deal was reached after months of negotiations and is expected to be finalized in the coming weeks.
The US had been seeking to recoup some of the money it is owed by the UK, which has been struggling with its debt since the Brexit vote in 2016. The US had been pushing for a deal that would allow it to recoup some of the money it is owed, while the UK had been seeking to limit the amount it would have to pay back.
Sectors
The banking sector was the biggest gainer, with the Stoxx Europe 600 Banks Index rising 1.2%. The insurance sector was also higher, with the Stoxx Europe 600 Insurance Index rising 0.7%.
The energy sector was the biggest loser, with the Stoxx Europe 600 Oil & Gas Index falling 0.7%. The materials sector was also lower, with the Stoxx Europe 600 Basic Resources Index falling 0.6%.
Currencies
The euro was little changed against the US dollar, trading at 1.2118. The British pound was also little changed against the US dollar, trading at 1.4134.
Bonds
The yield on the 10-year German bund was little changed at -0.06%. The yield on the 10-year UK gilt was also little changed at 0.76%.
Commodities
Crude oil prices were higher, with Brent crude trading at $71.60 a barrel. Gold prices were also higher, with spot gold trading at $1,873.50 an ounce.
Outlook
European stocks are likely to remain volatile in the near term as investors digest the news of the US-UK debt deal. The markets will also be watching for any further developments in the US-China trade talks, as well as any news on the US Federal Reserve’s monetary policy.