European shares follow Asian equities higher

Stocks in Europe climbed on Monday after shares in Asia surged to multi-year highs, shrugging off Friday’s losses. However, the euro continued to suffer from concerns over Greece’s ability to secure further financing for its debt.

Germany’s DAX was up almost 1.5 per cent in morning trading, the French CAC 40 climbed just under one per cent and the Euro Stoxx 50 was over 1.2 per cent higher.

Chinese stocks were boosted to seven-year highs on signs of additional coming stimulus from the People’s Bank of China, while the government's plan to build a modern Silk Road to Europe and Africa also added to the overall positive sentiment.

Investment for the “One Belt, One Road” initiative has been forecast to range between $48 and $64 billion, which has helped to lift the share price of a number of infrastructure related companies in China.

Demand for the euro dropped on Monday as talks over the weekend failed to produce a proper list of reform measures, which the heavily indebted nation of Greece is supposed to produce today in order to unlock fresh funds to finance its debt. However, an upbeat tone was noted throughout the discussions, but lenders said a few more days were needed for a comprehensive reform package would be finalised.

EUR/USD fell nearly 0.4 per cent by midday on Monday on euro’s woes and a rising dollar.

The US dollar saw gains across the board as comments from Federal Reserve chair Janet Yellen pointed towards gradual rate increases coming later in 2015. Despite the hawkish tone, she made sure to stress that the Fed was in no rush to raise rates and that monetary policy tightening could even pause or reverse in response to economic conditions.

The US economic recovery continues to outpace that of its counterparts, while its monetary policy is in stark contrast to that of Europe’s, which has increased demand for the greenback - especially with the prospect of higher rates coming this year.