ECB Rate Hike Expected as European Stocks Rebound

The European stock market has begun to recover from yesterday's sharp selloff, with regional equities attempting a modest rebound at the open.

Spain and Italy are leading early gains, with the Spain IBEX up by 0.6% and the Italy FTSE MIB up by 0.5%, while the Eurostoxx, Germany DAX, France CAC 40, and UK FTSE remain flat or just slightly higher.

The inflation threat remains a major concern, with Brent crude holding above $100, and global bond yields still elevated ahead of key interest rate decisions this week.

The European Central Bank (ECB) is expected to raise its key interest rates by 25 basis points later today, with investors closely watching the language and tone of ECB President Lagarde for clues on future policy tightening.