<ul>
<li><p>STOXX 600 up 2.1%</p></li>
<li><p>Oil and gas only major European sector to fall</p></li>
<li><p>Wall Street futures up 0.5%      Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at</p></li>
</ul>
<h3>GOLDMAN DIMS CHANCES OF FED HIKES DESPITE OIL JITTERS</h3>
<p>Traders have swung sharply from expecting two Federal Reserve rate cuts by year-end to flirting with the idea of hikes since fighting in the Middle East escalated, but Goldman Sachs is less convinced.</p>
<p>Oil prices have moved above $100 a barrel following the Iran conflict, prompting investors to reconsider their rate strategies amid heightened inflation risks.</p>
<p>Goldman however argues the current oil shock is smaller than past episodes and unlikely, on its own, to trigger tighter monetary policy.</p>
<p>“The Fed typically does not tighten in response to oil shocks alone,” Goldman said in a note. “We find no meaningful relationship between mentions of oil price shocks and tighter monetary policy in speeches by Fed officials.”</p>
<p>The bank said oil shocks tend to be temporary and weigh on demand, meaning rate hikes would risk damaging the labour market while doing little to curb inflation.</p>
<p>The Wall Street brokerage sees two quarter-point rate cuts by the Fed in September and December, similar to peers Morgan Stanley and UBS Global Wealth Management.</p>
<p>It added that inflation spillovers from higher oil prices are unlikely given cooling labour demand, subdued wage growth and anchored inflation expectations.</p>
<p>With monetary policy already restrictive, Goldman said a shock large enough to reignite inflation would more likely push the economy towards recession than prompt rate hikes.</p>
<p>“The FOMC is unlikely to hike,” it said.</p>
<p>(Kanchana Chakravarty)</p>
<h3>EARLIER ON LIVE MARKETS:</h3>
<h3>STOXX 600 JUMPS, STARTS APRIL ON A HIGH NOTE CLICK HERE</h3>
<h3>EUROPE BEFORE THE BELL: FUTURES UP ON GROWING HOPES OF IRAN WAR ENDING SOON CLICK HERE</h3>
<h3>APRIL FOOLS RUSH IN CLICK HERE</h3>
<p>The Korean Wave departs</p>
<p><img src="https://imageproxy.pbkrs.com/https://www.reuters.com/graphics/SOUTHKOREA-MARKETS/jnpwraneevw/chart.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" width="1420" height="1026" original-src="https://imageproxy.pbkrs.com/https://www.reuters.com/graphics/SOUTHKOREA-MARKETS/jnpwraneevw/chart.png"/></p>

- The STOXX 600 index rose by 2.1%, while oil and gas became the only declining sector in Europe.  
- Goldman Sachs reduced the likelihood of Federal Reserve interest rate hikes, despite rising oil prices due to Middle East tensions.  
- The bank expects two quarter-point rate cuts in September and December, citing limited inflation spillover effects from high oil prices and suggesting a potential economic recession rather than imminent rate increases.

LIVE MARKETS-Goldman dims chances of Fed hikes despite oil jitters