European markets closed slightly higher on Monday as traders searched for direction on a quiet day for markets.
The regional Stoxx 600 index was up by 0.28% with most sectors finishing in the green. Germany’s Dax and France’s CAC were both around 0.4% higher. Italy’s FTSE MIB and Spain’s Ibex 35 were up 0.7%.
U.K. markets are closed for the late May bank holiday, while stateside, U.S. markets are shut for Memorial Day.
It comes as speculation over when interest rates might start to come down dominates the news flow once again.
On Monday, two key European Central Bank figures threw their weight behind the prospect of a June interest rate cut.
“Thanks to this disinflationary process, inflation is converging to our 2% target in a sustained way, and the time is thus ripe in June to ease the monetary policy stance and start cutting rates,” ECB Governing Council Member Olli Rehn said in a speech.
Meanwhile, the ECB’s Chief Economist Philip Lane said in an interview with the Financial Times, “Barring major surprises, at this point in time there is enough in what we see to remove the top level of restriction.”
It indicates that the European Central Bank is going to act in June — sooner than the U.S. Federal Reserve, which usually leads the way in monetary policy decisions.
A number of strong economic and labor data releases in the U.S. last week saw Goldman Sachs push its forecast for the Federal Reserve’s first rate cut back to September from July.
Elsewhere, the EU Foreign Affairs Council met on Monday and discussed issues including the ongoing Russian-Ukraine war and tensions in the Middle East. French President Emmanuel Macron also continued his state visit to Germany.
There are no major earnings or data releases due Monday. Later in the week, traders will be eyeing euro zone inflation figures for May due on Friday.
In the Asia-Pacific region, markets were higher as industrial profits in China rose during the first four months of the year, according to official data.
China’s industrial profits rose 4.3% year on year in the January to April period, data from the National Bureau of Statistics showed.