European markets started the new trading week on an uncertain note on Monday as investors reassessed the economic outlook.
The pan-European Stoxx 600 was up 0.2 percent by early afternoon, with technology shares adding 1.5 percent while chemicals were down 0.5 percent.
Global markets are weighing the possibility that the Federal Reserve is preparing to slow the pace of interest rate hikes to fight inflation after economic data last week showed a drop in wholesale prices and retail sales.
On Friday, Federal Reserve Governor Christopher Waller said he favors only a quarter-point increase on February 1, when the central bank publishes its next policy update. Waller also said interest rates are already high enough to slow the economy.
Kristalina Georgieva, managing director of the IMF, told the World Economic Forum on Friday that the global economic outlook is not as bad as feared a few months ago – “but less bad still does not mean good”.
“We have to be cautious,” she told a closing panel at the World Economic Forum in Davos, moderated by CNBC.
U.S. stock futures were little changed on Monday morning, while stocks rose overnight in Asia, but most markets in the region are closed for the Lunar New Year holiday, with Shanghai markets closed for the week.
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