European stocks turned higher on Tuesday and bonds rallied as comments from the president of the ECB added fuel to investors’ hopes for easier monetary policies from the world’s biggest central banks.
The Stoxx Europe 600 reversed an early drop and the euro swung from a gain to a loss as European Central Bank President Mario Draghi said additional stimulus, including rate cuts, may be needed if the economic outlook doesn’t improve. S&P 500 index futures gained, while Japan’s Topix bucked the trend as most Asian gauges climbed.
Investors are also focusing on the Federal Reserve’s statement and press conference Wednesday to see whether Chairman Jerome Powell and his colleagues will validate widespread expectations for interest-rate cuts. Oil pared earlier declines, with OPEC nations still unable to agree on a date for their next meeting, adding to uncertainty over whether production cuts would be extended.
Traders have largely refrained from putting on big bets ahead of the key Fed decision coming Wednesday, where they will look for signals on the likelihood of interest-rates cuts ahead. That’s the headline act in a week that also includes the ECB gathering in Sintra, Portugal as well as Bank of England and Bank of Japan policy announcements.