European bank stocks booked solid early gains Monday as regional markets rebounded and the single currency rose against the U.S. dollar amid solid growth prospects and renewed speculation of near-term European Central Bank tightening.
The region wide Stoxx Europe 600 Banks index, the broadest measure of financial sector shares, was marked 2.8% higher in the opening hour of trading while Deutsche Bank AG (DB) shares were marked 3.25% higher at €14.67 each. Its domestic rival, Commerbank AG (CRZBY) , gained 3.4% to change hands at €11.10 each. BNP Paribas SA (BNPQY) , France's biggest lender, was seen 1.7% higher at €66.60 while Banco Santander SA (SAN) , the biggest bank in Spain, saw its London-listed shares rise 2.7% to 508 pence each.
The euro edged past 1.1820 against the U.S dollar and benchmark 10-year German government bonds yields, which move inversely to prices, rose 2 basis points to 0.41% as investors moved cash back into riskier areas of the global financial markets.
The rebound in bank shares, however, comes amid what is likely to be a one-week lull in headline news from the ECB as members of the rate-setting Governing Council, including President Mario Draghi, retreat for their traditional August holidays.
Draghi will return to his public speaking engagements on Wednesday Aug. 23 at an economic even in Germany after which he will travel to the Kansas City Federal Reserve's annual economic symposium in Jackson Hole, Wyoming, where he is expected to signal the Bank's intentions with respect to winding down the pace of its €60 billion a month in government and agency bond purchases.