European markets rose firmly higher Tuesday as bank stocks surged on increased speculation of a March rate hike from the U.S. Federal Reserve and industrial stocks gained on bets that President Donald Trump will find support for his $1 trillion in infrastructure spending plans.
The Stoxx Europe 600 Bank index was marked 1.74% higher at 172.38 points by 09:00 GMT, helped by a solid 3.9% gain for Deutsche Bank AG (DB) and a 2.9% rise for Credit Suisse (CS) . In Britain, Barclays plc (BCS) gained 1.3% while taxpayer-owned Royal Bank of Scotland (RBS) advanced 2.2%.
The gains helped lifted benchmarks around the region, with Germany's DAX performance index rising more than 1.15% in the opening hour of trading and the CAC-40 in Paris rising 1.05%. Britain's FTSE 100 was marked 0.52% higher.
The dollar rose firmly against a basket of six global currencies to trade 0.3% higher at 101.53, buoyed more by a series of remark from Fed officials, including New York Fed President William Dudley, who said the case for a rate hike later this month was "a lot more compelling". Fed Funds futures prices are now anticipating a 35.4% probability of a March rate hike, up from 31% in the previous session.
Stocks in Asia were mixed overnight, with the surging U.S. dollar supporting gains for the Nikkei 225, which rose 1.44% to close at 19,393.54 points. Markets in South Korea were closed for the country's Independence Movement Day celebrations while Australia's S&P/ASX ended the session 0.1% lower at 5,704.80 points. The region-wide MSCI Asia ex-Japan Index was marked 0.19% lower at 06:45 GMT.