Fed rebuttal of rate cut bets keeps Europe39;s stocks subdued
Hang Seng touches sixmonth top, yuan sets fourmonth high
Oil bounces after heavy slide on recession angst
Benchmark government bond yields tick higher after falls

LONDON, Jan 5 Reuters Europe39;s markets suffered an early stumble on Thursday as a firm message from the Fed that it won39;t be cutting interest rates any time soon offset optimism around China39;s phasing out of COVID restrictions.

News that China39;s mainland border with Hong Kong will be reopened after three years had sent AsianPacific shares outside Japan to a fourmonth high overnight, but with both the dollar and bond market borrowing costs higher postFed, Europe couldn39;t keep up.

The panEuropean STOXX slipped 0.3 after gaining more than 3 in its first three sessions of 2023 and Wall Street futures prices were pointing to a similar fall later.

London39;s FTSE did manage a small rise as betterthanexpected numbers from retail giant Next lifted the entire European sector, but that couldn39;t make up for the broader falls in Frankfurt and Paris.

Everyone expected a hawkish message and that is what we got, said MUFG39;s Head of Research for Global Markets EMEA, Derek Halpenny.

Really it39;s now about payrolls U.S jobs data tomorrow, he added, explaining that the labour market will be a big factor in how high inflation remains this year.

A strong print tomorrow and I think you are going to get a fairly rapid repricing for a 50 bps hikes…