European stock markets were higher Friday, after U.S. lawmakers passed a bill to raise the debt ceiling and cap government spending for two years, days before the default deadline.
The Stoxx 600 index was up 0.9% at 11:00 a.m. London time, as it climbed further from the two-month low hit on Wednesday. Mining stocks led gains, up 4.4%, while oil and gas rose 2% ahead of the June 4 OPEC+ meeting.
European markets
The Fiscal Responsibility Act cleared a Senate vote late Thursday, after passing the House of Representatives on Wednesday.
The ongoing drama has only slightly rattled markets in recent weeks, and focus now returns to the outlook for the U.S. economy, recession risk, and whether the Federal Reserve will raise, hold or even look at beginning to cut interest rates.
Recent comments from officials have indicated the central bank may opt to skip another hike at its June meeting. However, the picture is complicated by continued strength in U.S. data., including in consumer spending and manufacturing orders. Friday will see the release of a closely-watched labor market report.
In Europe, a significant fall in euro zone inflation to its lowest level since Feb. 2022 on Thursday was not enough to comfort European Central Bank President Christine Lagarde, who said the 6.1% figure was still "too high" and that the hiking cycle needed to continue until it was clear inflation would come down to its 2% target in a "timely manner."
ECB officials have given firm hints it will raise rates again this month, but economists say the outlook for July and September is more uncertain.
Governing Council member Francois Villeroy de Galhau said Thursday further hikes would be "relatively marginal" and "most of the path is complete."
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