Original Source: www.zonebourse.com
The European stock markets are currently in a state of cautious optimism, driven by anticipation of upcoming economic data which are crucial for gauging the region’s financial health. Investors are particularly focused on the inflation figures from Germany—Europe’s largest economy—as they may influence the European Central Bank’s (ECB) monetary policy decisions. With the US markets closed for Thanksgiving, European investors can direct their attention to these domestic indicators, scrutinising them for hints on economic recovery amid lingering uncertainties.
European markets opened on a promising note this Thursday, as investors braced themselves for fresh economic indicators, notably Germany’s November inflation figures. In Paris, the CAC 40 index climbed by 0.42%, reaching 7,172.76 points by 08:05 GMT. Meanwhile, the DAX in Frankfurt saw a 0.59% increase, and London’s FTSE reflected a modest gain of 0.2%.
The broad-based FTSEurofirst 300 index picked up 0.47%, while the EuroStoxx 50 soared by 0.78% and the Stoxx 600 advanced by 0.49%. The trading volumes were lighter, attributable to the Thanksgiving holiday closure of US markets, which allowed European investors to hone in on the forthcoming indicators.
There are expectations that private sector credit growth in the Eurozone will accelerate in October, buoyed by interest rate cuts from the European Central Bank (ECB). A resurgence in credit may herald a long-awaited revival in European economic activity, which has been mired in stagnation for two years. Additionally, Germany’s inflation figures will serve as a critical barometer for market expectations.
Should Germany’s inflation surprise with stronger-than-expected numbers, it may compel the ECB to adopt a more cautious easing approach than markets anticipate. Current expectations project a 25 basis point cut in the deposit rate over the next five meetings.
The uncertainty surrounding the French budget vote for 2025 adds yet another layer of potential volatility to both French and broader European assets, with the spread between French and German 10-year yields hitting a 12-year high this past Wednesday. In stock-specific news, Rémy Cointreau exhibited volatility, dropping 1.2% after a 4% dip in earlier trading, despite reporting a smaller-than-anticipated decline in its first-half operating profit.
