European stock markets posted modest gains on Monday as investors carefully analyzed regional inflation data, with central bank meetings, notably the upcoming U.S. Federal Reserve gathering, looming on the horizon.
As of 03:55 ET (08:55 GMT), Germany’s DAX index traded 0.3% higher, France’s CAC 40 climbed 0.3%, and the UK’s FTSE 100 rose by 0.6%.
Central Banks in Focus
Investors are eagerly anticipating interest rate decisions from the Bank of Japan, the Bank of England, and, most crucially, the Federal Reserve, with a keen eye on the guidance provided for future interest rate policies.
Last week, the European Central Bank (ECB) concluded the longest streak of interest rate increases in its 25-year history, keeping its primary policy rate at 4% and suggesting that prevailing borrowing costs may be sufficient to curb inflation if they persist at current levels for a considerable duration.
There were signs of receding inflation in Germany, with data released early Monday indicating a 3.1% rise in consumer prices for October on an annual basis in the state of North Rhine Westphalia, Germany’s most populous state. This marked a decrease from the 4.2% seen in the prior month. Spain added to the narrative, reporting an annual CPI figure of 3.5% in October, unchanged from the previous month and below the expected 3.8%.
Other German states are set to unveil their inflation figures later in the session, offering potential insights into future ECB policy decisions.
A Packed Week Ahead
The week ahead promises significant economic activity readings from China, the monthly U.S. labor report, and major third-quarter earnings reports from prominent U.S. companies, with a particular focus on tech giant Apple (NASDAQ:AAPL).
Investors will also closely monitor developments in the Middle East, where Israel launched a large-scale ground assault on Gaza over the weekend. However, there have been no apparent broader spillover effects in the broader Middle Eastern conflict.
HSBC Reports Strong Quarterly Profit
In corporate news, HSBC (LON:HSBA) saw its stock rise by 0.6% after Europe’s largest bank reported a third-quarter pre-tax profit of $7.7 billion, compared to $3.2 billion the previous year. The increase was attributed to higher interest rates, which bolstered the bank’s profitability and facilitated a $3 billion share buyback. Nevertheless, the reported figure fell slightly short of the expected $8.1 billion, mainly due to higher costs. HSBC indicated that costs are likely to increase by 4% this year, exceeding its prior goal of a 3% rise.
Glencore (LON:GLEN) shares rose by 0.7% after the commodity trader and miner reiterated its expectation that profits from its trading division would range from $3.5 billion to $4.0 billion, surpassing its long-term guidance range, despite adjustments to its nickel production guidance for the year due to maintenance and strikes.
Siemens Energy (ETR:ENR1n) witnessed its stock surging by over 6% as discussions with the German government over project-related guarantees worth billions of euros continued over the weekend.
Crude Oil Declines as an Eventful Week Begins
Oil prices dipped on Monday as traders adopted a cautious stance at the start of a week marked by a Federal Reserve policy meeting and the release of significant U.S. and Chinese economic data.
By 03:55 ET, U.S. crude futures traded 1.9% lower at $83.88 a barrel, while the Brent contract dropped 1.7% to $87.69 a barrel. Both benchmarks had recorded a 3% increase on Friday after Israel escalated its ground assault on Gaza, though they still reported substantial weekly losses. There are few indications that this conflict will escalate into a wider regional war.
Furthermore, gold futures gained 0.2% to reach $2,002.35/oz, while the EUR/USD exchange rate edged slightly higher to 1.0568.