European Markets Quiet as Investors Await Key US Interest Rate Decision
Muted movement in major indices as attention turns to the Federal Reserve, with global central banks set for a crucial week of policy calls.
European stock markets opened the week with little momentum, as traders looked ahead to an important Federal Reserve meeting expected to shape global monetary policy. With interest rate speculation driving sentiment, market activity remained restrained across major indices.
European Stocks Open Softly
European equities saw only modest moves on Monday morning, with investors opting to wait for clearer signals on US rate policy before taking fresh positions.
- Germany’s DAX slipped by 0.1%
- France’s CAC 40 fell 0.3%
- The UK’s FTSE 100 inched up 0.1%
This cautious tone reflects the market’s anticipation of potential economic turbulence depending on the outcome of the Federal Reserve’s discussions.
All Eyes on the Federal Reserve
The Federal Reserve’s two-day meeting concludes this Wednesday, and expectations are high that it will deliver an interest rate cut. Analysts point to last week’s softer-than-forecast core PCE inflation data as a key factor strengthening the case for easing monetary policy.
Current futures pricing suggests an 88% likelihood of a rate cut. Yet uncertainty persists. Divisions within the Fed regarding inflation risks and the resilience of the US economy could shape not only this week’s decision, but also the forward guidance that markets will weigh carefully.
The Fed’s stance is expected to influence global sentiment, energy markets and upcoming central bank decisions elsewhere.
A Wave of Central Bank Meetings Ahead
The Fed will not be alone in steering the financial agenda this week. A cluster of major central banks are also due to meet, setting the tone for international monetary policy.
- Swiss National Bank
- Reserve Bank of Australia
- Bank of Canada
Looking to the following week, decisions are also expected from:
- Bank of England
- Bank of Japan
- European Central Bank
This dense calendar is likely to keep traders cautious as they assess how coordinated or divergent policy responses may become.
German Industry Shows Signs of Strength
Fresh data from Germany offered a rare bright spot, revealing industrial production rose 1.8% in October, far above forecasts of just 0.4%. This suggests Europe’s largest economy may be stabilising after a challenging period.
While the German Economic Institute last week projected minimal growth of 0.1% for 2025, it also anticipates improvement in 2026 with GDP expected to rise to 0.9%. However, global trade headwinds and weak export demand remain key obstacles.
Unilever Spins Off Ice Cream Business
In corporate news, Unilever shares dipped following confirmation of its ice cream division demerger. The newly formed Magnum Ice Cream Company, home to household names such as Wall’s, Cornetto and Ben & Jerry’s, now trades independently.
- Primary listing launched on Euronext Amsterdam
- Secondary listings to follow in London and New York
This marks one of the most prominent European consumer-goods separations in recent years.
Oil Prices Hover Near Two-Week Highs
Crude oil continued its steady climb, supported by expectations that a Fed rate cut could boost energy demand.
- Brent crude up 0.3% to $63.92 per barrel
- WTI crude up 0.3% to $60.28 per barrel
Prices remain at their strongest levels since mid-November. However, geopolitical tensions and ongoing negotiations around Russian supply sanctions by the G7 and EU could inject further volatility into the market.
With investors poised for clarity from the US Federal Reserve, European markets look set for a week shaped by monetary policy decisions at home and abroad.
Sources : (Investing.com, Reuters.com)
