STOXX rises to 6-month high after Powell

STOXX RISES TO 6-MONTH HIGH AFTER POWELL (0900 GMT)

The pan European index rose to its highest since June cheered by U.S. Federal Reserve Chair Jerome Powell signalling smaller interest rate hikes ahead.

China softening its tone on strict COVID-19 rules has also offered some support.

After November ended as its best month since July, the STOXX 600 index SXXP rose 0.8%, with the tech sector (.SX8P) leading the pack, up 2.6%, surging to a three-week high.

Capping the gains, autos (.SXAP) and oil (.SXEP) sectors are under pressure. Energy stocks fell as oil prices dipped amid uncertainty ahead of Sunday's OPEC+ meeting.

(Joice Alves)

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STOP MAKING SENSE (0747 GMT)

With a Fed pivot coming in to view, thanks to Jerome Powell, and optimism about China's reopening prospects, investors have rediscovered their risk appetite, pouring into equities and sending safe-haven U.S. dollar lower.

All it took was for Fed Chair Powell to suggest that the central bank could slow the pace of its interest hikes when it next meets in two weeks, without giving any new hawkish hints.

"It makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down," Powell said.

Job done?

Perhaps not, but markets are moving ahead with an assumption we're nearly there.

European futures indicate stocks in the region will spike higher, tracking Asian equities, which were tracking Wall Street. The dollar remains in descent mode, while U.S Treasuries are rallying.

Also helping investor sentiment were signs from China that the country was softening its stance on COVID-19 restrictions as several cities in the world's second-largest economy lift district lockdowns even as cases rise.

The market seems to shrug off China's factory activity, which shrank in November, and the risk that the path out of COVID controls is long and messy. Lockdowns in China along with slowing demand have weighed on factory output across Asia.

Meanwhile, the lone "dove" among major central banks, the Bank of Japan, will aim to keep interest rates ultra-low until wage growth gets a boost, board member Asahi Noguchi said in a speech to business leaders. "To promote wage growth, the BOJ needs to patiently maintain its current monetary easing."

Key developments that could influence markets on Thursday:

Economic events: Germany Oct retail sales; Nov PMI's globally final

Speakers: Fed Reserve Bank of Dallas President Lorie Logan

Earnings: Dollar General, Kroger

Bond auctions: UK, Japan, Spain, France sell bonds

(Ankur Banerjee)

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EUROPEAN SEEN HIGHER AS POWELL SAYS FED TO SLOW HIKES (0738 GMT)

European futures are pointing to a start of the day in positive territory for bourses across the region, continuing a global risk-on mood after Federal Reserve Chair Jerome Powell opened the door to a slowdown in the pace of monetary tightening.

The Fed could scale back the pace of its interest rate hikes "as soon as December," Powell said on Wednesday, while cautioning the fight against inflation was far from over.

The pan-region EUROSTOXX 50 futures FESX1! is up 0.9%, German DAX futures DAX1! rises 0.9% higher and FTSE futures Z1! edges 0.14% higher.

(Joice Alves)

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