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European stocks snapped back on Monday, rallying on hopes that central banks across the world will deliver interest-rate cuts.
The Stoxx Europe 600 SXXP, +1.89% climbed 2.1% to 383.60. Even with Monday’s gains, the index is still down about 7% over the last month.
The U.K. FTSE 100 UKX, +2.58% climbed 2.5% and the German DAX DAX, +1.43% added 1.4%.
Futures on the Dow Jones Industrial Average YM00, +1.96% surged 608 points.
After European stock markets had closed on Friday, Federal Reserve Chairman Jerome Powell said the central bank was willing to act as appropriate to help the U.S. economy. In addition, Bank of Japan Gov. Haruhiko Kuroda said the Japanese central bank would “provide ample liquidity and ensure stability in financial markets through appropriate market operations and asset purchases.”
As measured in the futures markets, there’s now a 63% chance the Bank of England will cut interest rates by a quarter point at its March 26 meeting.
“The market’s growing hopes regarding potential rate cuts on a global scale may ensure a rather cheerful mood for the time being,” said Marc-André Fongern, head of FX research at Fongern Global Forex.
The gains came even after dreadful data showing the Chinese economy’s deep downturn in February.
The deadly coronavirus kept spreading, claiming its first two victims in the United States as cases reached 89,074 worldwide.
