Good European banking results give financial stocks a shot in the arm
London — Encouraging results from some of Europe’s biggest banks gave financials a boost on Thursday and helped offset weakness in oil-related stocks, while higher bond yields underpinned the dollar. As corporate earnings continued to dominate headlines, mounting expectations of a US Federal Reserve rates rise by the end of the year have kept gains in risky assets in check. Markets are pricing in a 74% chance that the US Federal Reserve will raise interest rates at its December meeting, according to CME Group’s FedWatch tool, following a series of hawkish comments from Fed policymakers. Bets that the Fed will hike rates have driven the dollar to nine-month highs against a basket of currencies this week and have supported US 10-year Treasury yields. The "steepening of the US yield curve works as a magnet for capital coming at this point in particular out of low-yielding environments such as Japan and Switzerland," said analysts at Morgan Stanley. These flows would continue to support...
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