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• European Stocks Rise as Focus Shifts to Central Bank Insights: European stocks saw gains as investor attention turned to the Sintra conference of central banks, eagerly awaiting guidance on future interest rate outlook from the heads of major central banks.
• A deceleration in Inflation Rates Provides Relief: The notable deceleration in inflation rates in Australia and Canada offered some relief, suggesting a potentially more moderate increase in global interest rates.
• New Restrictions on AI Chip Exports Discussed: Deliberations in Washington about imposing new restrictions on the export of artificial intelligence chips to China influenced market sentiment.
• Arkema Announces Acquisition Proposal: Chemicals group Arkema revealed its proposed acquisition of a majority stake in South Korean company PI Advanced Materials for €728 million.
• German DAX and STOXX 600 Show Strength: Both Germany’s DAX and the pan-European STOXX 600 demonstrated resilience, adding 0.5% in morning trade.
• Euro Approaches Six-Week High: The euro climbed above $1.09, nearing a six-week high reached in late June, reflecting investor expectations of further interest rate increases in the Euro Area.
• ECB President Signals Prolonged Rate Increases: ECB President Christine Lagarde indicated that peak interest rates are unlikely to be reached soon, as persistent high inflation in the Euro Area influences monetary policy decisions.
• Lingering Doubts about Euro Area’s Economic Health: Weak PMI and Ifo data continue to raise concerns about the economic outlook for the Euro Area, casting doubt on its overall health.

The STOXX 600 index is showing a modest 0.4% gain, reaching €456.8 in the European trading session. The market is experiencing a balanced price range on the daily interval, with buyers strategically establishing core long positions near the current lower extreme. However, caution is warranted as the short-term perspective indicates trading above recent swing highs, which may prompt absorption for a potential rotation lower.

The prevailing strength of the dollar during this session adds to market sentiment pressure, compounded by a positive volatility index in the US. This combination suggests the possibility of impending selling behavior in the equities market. It is worth noting that yesterday’s VWAP close level around €454 could act as a support level for buyers in today’s session.

The ongoing interest rate increases as part of the ECB’s current tightening cycle are exerting significant pressure on stocks and the STOXX 600 index at present.

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