On Monday, European markets reached their highest level in almost a year as U.S. earnings season begins, and Chinese data is expected to reveal how swiftly the world’s second-largest economy is rebounding.

JP Morgan (JPM.N), Citigroup (C.UL), and Wells Fargo (WFC.N) reported better-than-expected first-quarter profits on Friday, boosting the market mood after a month of banking industry upheaval.

“Kicking off on a high note, the U.S. earnings season saw leading U.S. banks disclose figures that exceeded expectations, even in light of the sector’s recent upheaval,” said INVICO Asset Management managing director Bruno Schneller.

Schneller said this positive news reduced the probability of a rate cut later this year.

CME futures now predict an 81% likelihood the Federal Reserve will raise rates by a quarter point to 5.0-5.25% in May.

Investors reduced the amount of easing predicted later this year to 55 basis points (bps) because to core U.S. retail sales resilience and a Friday inflation outlook increase.

Eight top Fed officials, including three governors, are speaking this week, which could generate headlines to change the dial.

The pan-European STOXX 600 index (.STOXX) achieved a 14-month high and was last up 0.14%, while the blue-chip STOXX50 index hit a 22-year high, and U.S. stock futures pointed to a flat to slightly positive Wall Street beginning.

The Nikkei and world shares (.MIWD00000PUS) were unchanged.

Chinese blue chips (.CSI300) rose 1.4% ahead of retail sales, industrial output, and GDP statistics on Tuesday, where analysts expect an upside surprise given recent trade momentum.

China’s new home prices rose the fastest in 21 months over the weekend, boosting consumer confidence.

Before Goldman Sachs (GS.N), Morgan Stanley (MS.N), and Bank of America (BAC.N) earnings announcements, S&P 500 futures rose 0.1%, and Nasdaq futures were flat.

Financial shares underperformed the European market and were down almost a third (.SX7P).

Johnson & Johnson, Netflix, and Tesla also reported results this week.

Bank of America (BofA) analyst Savita Subramanian is more concerned about 2023 than Q1 S&P 500 earnings, which are expected to dip 5.2%.

“Overall, we expect an in-line quarter, but big cuts for the full-year,” BofA said. As a result, our 2023 S&P 500 EPS projection is $200, 9% below consensus.

“Demand for consumer goods has already softened and now we’re watching services,” Subramanian added. “Airlines, hotels, and restaurants are feeling pressure from slowing macro, tough comps (comparison periods), and no respite from wage pressure.”

Last week, Fed projections raised U.S. two-year rates by 11 basis points to 4.11%.

Monday saw flat German, French, and Italian two-year yields.

Markets expect 37 bps of tightening at the ECB’s May meeting and 82 by October.

Even after a Friday drop, rate rise expectations lifted the euro 0.8% last week. The euro held at $1.09775 on Monday after reaching a one-year high of $1.1075 last week.

The dollar has outperformed the yen as long as the Bank of Japan maintains its ultra-loose monetary policy. On Monday, the dollar reached 134.22 yen, its highest level since March 15, last up 0.16% at 133.9.

Gold fell to $2,009 an ounce from last week’s top of over $2,048 as the dollar rose.

Oil prices have risen for four weeks, supported by output restrictions and the West’s energy watchdog’s prediction that Chinese consumption will rise to a record this year.

On Monday, Brent and U.S. crude fell 0.7% to $85.79 and $81.99 a barrel, respectively.