European equities started the week on a subdued note Monday, with traders reluctant to make bold moves ahead of the Federal Reserve’s closely watched policy announcement later this week.
By 08:25 GMT, Germany’s DAX was down 0.1%, France’s CAC 40 slipped 0.3%, while the U.K.’s FTSE 100 posted a modest 0.1% gain.
Fed decision takes center stage
The Fed is widely expected to cut interest rates on Wednesday, especially after last week’s delayed release of September’s core PCE index showed weaker-than-expected inflation. Futures markets tracked by CME’s FedWatch tool indicate an 88% probability of a rate cut.
Still, the outlook for future policy remains uncertain. Fed officials appear divided over how persistent inflation risks are and how resilient the U.S. economy remains, leaving the central bank’s forward guidance in focus.
A busy week for central banks globally
The Fed is just one of several monetary authorities meeting in the coming days. Markets will also hear from the Swiss National Bank, the Reserve Bank of Australia, and the Bank of Canada this week.
Next week, attention shifts to the Bank of England, the European Central Bank, and the Bank of Japan as they deliver their latest policy assessments.
German industrial output surprises to the upside
Fresh data released Monday showed German industrial production jumping 1.8% in October from the previous month—far above expectations for a 0.4% rise. The stronger reading offers a glimmer of optimism for the eurozone’s largest economy as the year winds down.
Still, Germany’s recovery is expected to remain muted. The German Economic Institute (IW) recently projected GDP growth of just 0.1% for 2025 after two years of contraction, before an acceleration to 0.9% in 2026.
Unilever completes ice cream business spin-off
In corporate news, shares of Unilever (LSE:ULVR) slipped after the company confirmed the separation of its ice cream division. The newly independent Magnum Ice Cream Company—now the largest standalone ice cream business globally and owner of brands such as Wall’s, Ben & Jerry’s, and Cornetto—has secured a primary listing on Amsterdam’s Euronext exchange, with secondary listings in London and New York to follow.
Oil holds near two-week highs
Crude prices edged up Monday, staying close to their highest levels in two weeks as expectations for a Fed rate cut bolstered hopes of stronger economic activity and energy demand. Brent futures rose 0.3% to $63.92 per barrel, while U.S. West Texas Intermediate futures gained 0.3% to $60.28 per barrel. Both benchmarks ended Friday at their strongest close since November 18.
Beyond monetary policy, geopolitical developments continue to influence oil markets. With progress toward peace in Ukraine still limited, Reuters reports that the G7 and European Union are considering replacing the price cap on Russian oil with a full maritime services ban — a move that could further restrict supplies from the world’s second-largest oil exporter.
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