European equities edged higher on Monday, starting the week positively as investors awaited several key central bank meetings, including the U.S. Federal Reserve and the Bank of England.
By 07:05 GMT, Germany’s DAX was up 0.5%, France’s CAC 40 gained 0.5%, and the U.K.’s FTSE 100 rose 0.1%.
Focus on the Fed
Market participants are bracing for a critical Federal Reserve meeting later this week. Recent economic indicators suggest a softening labor market alongside subdued inflation, raising expectations of a potential rate cut when the Fed concludes its session on Wednesday. Optimism around this scenario helped push U.S. stock indices to record levels last week, with the tech-heavy Nasdaq Composite closing Friday at a new high.
The Fed is not the only central bank in the spotlight this week. The Bank of England, which cut rates five times in just over a year, is expected to hold rates steady on Thursday, even with inflation at 3.8% in July—the highest among G7 nations and nearly double the Bank of England’s medium-term target. Other central banks set to announce policy include those in Japan, Canada, and South Africa.
China Growth Slows
In Europe, there was little domestic economic data on Monday, but sentiment was affected by China’s August economic figures. Factory output and retail sales showed their slowest growth since last year, with industrial production up 5.2% year-on-year (down from 5.7% in July) and retail sales rising 3.4%, the slowest pace since November 2024.
Corporate Developments
In corporate news, German defence firm Rheinmetall (TG:RHM) announced an agreement to acquire the military shipbuilding division of the Luerssen Group, Naval Vessels Luerssen, marking its expansion into naval construction. Transaction terms were not disclosed, and the deal is expected to close early next year, subject to antitrust approval.
Meanwhile, AO World (LSE:AO.) boosted its profit forecast and announced its first-ever £10 million share buyback after reporting double-digit revenue growth for H1 2025.
Oil Markets
Oil prices rose Monday, continuing recent gains amid concerns over Russian supply disruptions following Ukrainian drone strikes on Moscow’s energy infrastructure. At 03:05 ET, Brent futures climbed 0.3% to $67.22 per barrel, while U.S. West Texas Intermediate crude rose 0.1% to $62.75 per barrel. Both benchmarks gained more than 1% last week as attacks targeted Russia’s Primorsk export terminal and the Kirishinefteorgsintez refinery, potentially reducing crude output and affecting key markets such as India and China.
This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.
Leave a Reply