European stock markets edged higher on Monday at the start of the final full trading week of the year, as investors prepared for several major central bank policy decisions and a batch of delayed U.S. economic data releases.
By 03:05 ET (08:05 GMT), Germany’s DAX index was up 0.4%, France’s CAC 40 gained 0.4%, and the UK’s FTSE 100 rose 0.5%, reflecting cautious optimism across the region.
Central banks in focus as ECB leads policy week
Global sentiment has improved slightly following last week’s decision by the U.S. Federal Reserve to cut interest rates by 25 basis points. However, gains in European equities remained limited as markets entered a week packed with risk events.
Key among them are upcoming policy decisions from the European Central Bank and the Bank of England, alongside ongoing concerns over a potential real estate crisis in China. The ECB meets on Thursday and is widely expected to keep its main interest rate unchanged at 2% for a fourth consecutive meeting. Investors will be watching closely for any guidance suggesting that a rate hike could be considered in 2026, particularly after eurozone economic growth exceeded expectations in the third quarter.
The Bank of England’s decision is less clear-cut. Markets are pricing in the possibility that Governor Andrew Bailey could tip the balance toward a narrow 5–4 vote in favor of cutting the benchmark rate to 3.75% from 4.0%.
Other European central banks, including Sweden’s Riksbank and Norway’s Norges Bank, are also set to deliver their final monetary policy decisions of 2025 this week.
Key U.S. and European data awaited
Attention is also turning to a series of delayed U.S. economic reports, including October retail sales and the closely watched November nonfarm payrolls data. Federal Reserve Chair Jerome Powell emphasized at the last FOMC meeting that future rate decisions will remain data dependent, placing added importance on these releases.
In Europe, investors will analyze December PMI surveys as well as upcoming inflation figures for both the eurozone and the UK, which could influence monetary policy expectations heading into the new year.
Earlier in the day, data from China showed that industrial production and retail sales grew less than expected in October, while fixed asset investment declined sharply. The weak figures reinforced concerns about slowing growth in the world’s second-largest economy and increased pressure on Beijing to introduce further stimulus measures.
Worries over China’s property sector also persisted after state-backed developer China Vanke failed to secure approval from bondholders to delay repayments on a domestic bond due later this month.
Corporate news and oil prices
On the corporate front, Sanofi shares were in focus after the French pharmaceutical group announced that its experimental multiple sclerosis drug tolebrutinib failed to meet its primary endpoint in a Phase 3 trial. Separately, Hikma Pharmaceuticals said its Chief Executive Officer Riad Mishlawi has stepped down by mutual agreement.
Oil prices edged higher, recovering slightly from sharp losses seen last week. Brent crude futures rose 0.4% to $61.34 a barrel, while U.S. West Texas Intermediate crude climbed 0.4% to $57.46 a barrel. Both benchmarks had fallen more than 4% last week amid concerns that global oil supply is growing faster than demand.
