European equities opened the week on a stable note, with investors closely watching several major catalysts including upcoming central bank policy meetings, high-level U.S.–China trade talks, and a heavy slate of corporate earnings.
At 07:15 GMT, Germany’s DAX rose 0.2%, France’s CAC 40 slipped 0.1%, and the UK’s FTSE 100 traded largely flat.
U.S.–China Trade Framework
Market sentiment improved late last week after news emerged that Donald Trump is set to meet Xi Jinping during next week’s APEC summit in South Korea. Negotiators from both sides have reportedly agreed on the framework of a trade deal for the leaders to finalize.
A successful agreement could pause steep U.S. tariffs on Chinese goods and ease restrictions on rare earth exports, helping to calm investor concerns over trade tensions that have weighed on the global outlook.
“I’ve got a lot of respect for President Xi and I think we’re going to come away with a deal,” Trump told reporters aboard Air Force One.
Fed to Lead Central Bank Parade
Market expectations for a U.S. interest rate cut have strengthened after annual inflation fell to 3% in September, below forecasts. According to the CME FedWatch tool, traders are pricing in a 96% probability that the Federal Reserve will cut rates by 25 basis points at its meeting this week.
Other major policy meetings include the Bank of Japan and Bank of Canada, while the European Central Bank is widely expected to hold rates steady, given inflation remains near its 2% target and growth appears stable.
Investors will also be monitoring the upcoming German Ifo business sentiment data for further signals of economic confidence in the eurozone’s largest economy.
Mega-Tech Earnings in Spotlight
Corporate earnings are another key focus this week, particularly in the U.S., where several mega-cap technology firms are set to report. Results are expected from Microsoft (NASDAQ:MSFT), Apple (NASDAQ:AAPL), Alphabet (NASDAQ:GOOGL), Amazon (NASDAQ:AMZN), and Meta Platforms (NASDAQ:META), five members of the so-called “Magnificent Seven.”
In total, around one-third of S&P 500 constituents are scheduled to release earnings this week, including Eli Lilly and Company (NYSE:LLY), Exxon Mobil (NYSE:XOM), Chevron Corporation (NYSE:CVX), Visa Inc. (NYSE:V), and Mastercard Incorporated (NYSE:MA).
In Europe, Galp Energia (EU:GALP) reported a 53% jump in third-quarter net income, driven by stronger refining margins and higher commercial and trading results.
Crude Supported by Trade Talk Progress
Oil prices steadied on Monday, extending last week’s gains as optimism over U.S.–China trade progress helped ease concerns of further economic fallout between the world’s two largest economies.
Brent crude futures slipped 0.1% to $65.17 a barrel, while U.S. West Texas Intermediate crude futures also fell 0.1% to $61.48 a barrel.
Crude has strengthened in recent sessions after the U.S. imposed new restrictions on Russia’s oil industry, targeting its largest energy firms. Signs of easing trade tensions have provided additional support, helping to stabilize the market following earlier volatility.
Leave a Reply