European markets are poised for a positive start to the week, building on last week’s momentum, buoyed by signs that the recent surge in consumer prices might be abating.
In a reassuring development, euro zone inflation has descended to its lowest point since October 2021, dropping to 4.3% for the month of September, as per preliminary data. The European Central Bank had raised interest rates to a historic level just last month, but economists and investors now anticipate that rates may have reached their peak.
Stock Markets Experienced Mixed Performance
Meanwhile, in the Asia-Pacific region, stock markets experienced mixed performance following encouraging manufacturing data from China, indicating a return to expansionary territory.
Overrate mortgages. This shift may alleviate some pressure on new homebuyers and those looking to remonight in the United States, stock futures surged as trading commenced. This came after U.S. legislators reached a temporary agreement, averting a government shutdown and instilling confidence in the markets.
In the United Kingdom, house prices remained steady in September when compared to the previous month. However, on a year-on-year basis, they registered a decline of 5.3%, according to data from lender Nationwide. This follows a 0.8% monthly decline in August.
Market Activity Continued to Show Signs of Weakness
Robert Gardner, Nationwide’s Chief Economist, highlighted that market activity continued to show signs of weakness, with mortgage approvals lagging behind their pre-pandemic levels by approximately 30% in 2019. Gardner pointed out that reduced expectations for the Bank of England’s peak interest rate had exerted downward pressure on longer-term interest rates, affecting fixed-rtgage.
Gardner added that while it was unlikely for borrowing costs to return to the historic lows witnessed after the pandemic, a combination of robust income growth, slightly lower house prices, and favorable mortgage rates could gradually enhance affordability over time. In the interim, the housing market is expected to remain relatively subdued.
Optimism in the European Markets
The positive outlook in European markets is fueled by several factors, including easing inflationary pressures within the euro zone and the global trends influencing investor sentiment. With hopes that central bank interest rates have peaked, investors are looking ahead with optimism, while developments in other parts of the world contribute to overall market confidence.