European equity markets edged slightly lower on Monday, with investors taking a cautious stance ahead of key U.S. inflation data following the Federal Reserve’s recent rate cut.
At 07:05 GMT, Germany’s DAX fell 0.3%, France’s CAC 40 slipped 0.1%, and the U.K.’s FTSE 100 dropped 0.1%.
Fed Officials and Inflation Data in Focus
Global markets had benefited from record-high Wall Street closes last week after the Fed’s interest rate cut, but momentum cooled on Monday amid uncertainty over the central bank’s future policy path. Traders are currently pricing in 44 basis points of easing across the two remaining Fed meetings this year.
Fed policymakers John Williams, Thomas Barkin, and Stephen Miran are scheduled to speak at separate events on Monday, while attention will turn to Raphael Bostic, Michelle Bowman, and Fed Chair Jerome Powell on Tuesday. Their comments, alongside upcoming economic data, are expected to play a pivotal role in shaping near-term investor sentiment.
The U.S. personal consumption expenditures price index, the Fed’s preferred measure of inflation, is set for release on Friday. The August figure is forecast to rise slightly to 2.8% from July’s 2.6%. In Europe, a flash estimate of eurozone consumer confidence for September is due later in the session.
China Maintains Interest Rates
Meanwhile, the People’s Bank of China kept its benchmark loan prime rate unchanged for the fourth consecutive month, in line with expectations. Investors are also watching ongoing trade discussions between the U.S. and China, including last week’s agreement regarding U.S. operations of TikTok.
Companies must also digest the Trump administration’s latest immigration directive, which went into effect Sunday. The proclamation imposes a $100,000 fee for H-1B visas needed for new employees entering the U.S.
Corporate and Energy Updates
In corporate news, Swedish telecom equipment maker Ericsson (BIT:1ERICB) announced an eight-year contract worth approximately $1.3 billion to supply 5G infrastructure to VodafoneThree’s U.K. mobile network. The deal follows the June merger of Vodafone (LSE:VOD) and CK Hutchison’s (USOTC:CKHUY) U.K. operations, which created VodafoneThree and included plans to invest £11 billion ($14.8 billion) over the next decade in one of Europe’s most advanced 5G networks.
Oil prices rose on Monday, supported by heightened geopolitical tensions in the Middle East and the potential impact of new EU measures targeting Russian energy revenues. At 03:05 ET, Brent crude futures gained 0.7% to $67.19 a barrel, while U.S. West Texas Intermediate rose 0.7% to $62.84 a barrel. Both benchmarks had fallen more than 1% on Friday amid concerns about oversupply and declining demand.
Weekend developments, including the recognition of a Palestinian state by four Western nations, added to Middle East uncertainty, a key oil-producing region. Additionally, the European Commission on Friday proposed its 19th sanctions package against Russia, targeting traders, refineries, and petrochemical firms in third countries—including China—that violate existing rules on Russian energy imports.
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