Europe Holding Up Better Than Expected Amid Fragile Economic Situation

Austria's central bank chief Martin Kocher says Europe is holding up better than expected and could handle higher interest rates if more tightening proves necessary. Since the summer, Kocher has seen firmer momentum in the region, with brighter sentiment readings and signs of an industrial rebound.

He pointed to a fragile economic situation, saying that rate hikes are 'unpleasant' as they pull down overall demand. However, he noted that the European Central Bank (ECB) will reassess its stance at every meeting, allowing fresh data and events to set the pace.

The ECB has already lifted rates twice this cycle, with markets penciling in three more hikes before tightening ends. Kocher kept his views non-committal about the next move, warning of uncertainty tied to the Middle East-related price shock.