European equities moved modestly higher on Monday as trading began for the final full week of the year, a period set to feature several major central bank decisions alongside a backlog of important U.S. economic data releases.
By 08:05 GMT, Germany’s DAX was up 0.4%, France’s CAC 40 had added 0.4%, and the UK’s FTSE 100 was trading 0.5% higher.
Central banks take centre stage
Sentiment has been supported by last week’s decision from the U.S. Federal Reserve to cut interest rates by 25 basis points, helping lift global markets as the year draws to a close.
However, gains were restrained at the start of the week, with investors facing a dense calendar of potential risk events. These include policy meetings at the European Central Bank and the Bank of England, alongside ongoing concerns about stress in China’s property sector.
The ECB is due to announce its decision on Thursday and is widely expected to keep its main interest rate unchanged at 2% for a fourth consecutive meeting. Markets will be watching closely for any indication that policymakers could lean towards a rate hike in 2026, particularly after data showed eurozone growth of 0.3% in the third quarter, well above the ECB’s September projections.
The outlook is less clear at the Bank of England, where Governor Andrew Bailey is expected to shift his stance, potentially tipping the vote in favour of a rate cut. Markets are pricing in a narrow 5–4 decision to lower the benchmark rate to 3.75% from 4.0%.
Other central banks, including Sweden’s Riksbank and Norway’s Norges Bank, are also scheduled to deliver their final policy decisions of 2025 this week.
Focus on delayed U.S. data
Attention will also turn to the release of several postponed U.S. economic indicators, notably October retail sales figures and the closely watched November nonfarm payrolls report.
Federal Reserve Chair Jerome Powell reiterated at the most recent FOMC press conference that future policy moves will depend heavily on incoming data, making this week’s releases particularly important for rate expectations.
In Europe, investors will also assess December PMI surveys, along with updated inflation readings for both the euro area and the UK.
Earlier in the session, data from China showed that industrial production and retail sales rose less than expected in October, while fixed asset investment — a key measure of business spending — contracted more sharply than forecast. The figures reinforced concerns about slowing momentum in the world’s second-largest economy and increased expectations of further stimulus from Beijing.
Worries around China’s property sector also persisted after state-backed developer China Vanke failed to secure creditor approval to extend repayments on a domestic bond due on December 15.
Corporate updates in focus
On the corporate front, with most of the European earnings season now behind markets, Sanofi (EU:SAN) drew attention after the French drugmaker reported that its experimental treatment tolebrutinib failed to meet its primary endpoint in a Phase 3 trial for primary progressive multiple sclerosis.
Separately, Hikma Pharmaceuticals (LSE:HIK) said that Riad Mishlawi has stepped down as chief executive and resigned from the board by mutual agreement.
Oil prices recover slightly
Oil prices edged higher on Monday, recovering modestly after steep declines last week. Traders weighed the risk of potential supply disruptions stemming from rising tensions between the U.S. and Venezuela, alongside speculation around a possible Russia-Ukraine peace agreement.
Brent crude futures rose 0.4% to $61.34 a barrel, while U.S. West Texas Intermediate gained 0.4% to $57.46. Both benchmarks fell by more than 4% last week, largely driven by concerns that global oil supply is growing faster than demand.
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