European stocks opened the week higher on Monday as investors positioned ahead of several key central bank decisions. At 07:05 GMT, Germany’s DAX index gained 0.5%, France’s CAC 40 climbed 0.5%, and the U.K.’s FTSE 100 edged 0.1% higher.
The U.S. Federal Reserve’s policy meeting is the most closely watched event. Markets widely expect the Fed to announce its first interest rate cut since December 2024 when it concludes on Wednesday. Recent U.S. data has pointed to a cooling labor market and easing inflation, fueling optimism that policymakers will move to support growth.
This sentiment has already lifted U.S. equities, with the Nasdaq Composite closing last Friday at a record high. Investors will be watching the Fed’s updated economic projections and Chair Jerome Powell’s comments for signals on the pace of cuts ahead.
Global Central Banks in Focus
While the Fed dominates attention, other central banks are also in play. The Bank of England, which cut rates five times in just over a year, is expected to hold steady on Thursday as U.K. inflation remains elevated at 3.8% in July—nearly double its 2% target.
Elsewhere, central banks in Japan, Canada, and South Africa are also due to meet this week. These decisions come as global markets digest weak Chinese economic data:
- Industrial output rose 5.2% year-on-year in August, the slowest growth since August 2024.
- Retail sales increased only 3.4% in August, the weakest reading since November 2024.
These figures point to waning momentum in the world’s second-largest economy, raising concerns about global demand.
Corporate Moves and Energy Market Shifts
European corporate news added to the market narrative. Germany’s Rheinmetall announced it would acquire Naval Vessels Luerssen, the shipbuilding arm of Luerssen Group, expanding its defense operations into naval construction. The deal is expected to close early next year pending antitrust approval.
In retail, AO World upgraded its profit outlook and unveiled its first-ever share buyback. The company reported double-digit revenue growth in the first half of the year, underscoring consumer resilience despite economic headwinds.
Oil markets also extended gains. At 03:05 ET, Brent crude traded at $67.22 a barrel, up 0.3%, while WTI rose 0.1% to $62.75. The advance follows Ukrainian drone strikes on Russia’s Primorsk oil terminal and the Kirishi refinery, both critical facilities.
The attacks raise the risk of disruptions to Russian crude exports, especially to major buyers such as India and China, adding to supply-side uncertainty.