European stock markets opened the week on a tentative note, with little movement in London and Milan, a 0.1% dip in Paris, and a 0.2% rise in Frankfurt. The main event this week is expected to be the meeting of the Federal Reserve's policy committee (FOMC).
"The Fed is expected to cut rates by 25 basis points next week, while signaling caution and a slower trajectory than markets anticipate," Société Générale forecast on Friday.
"The inflation index most closely watched by the Fed, the 'core PCE,' came in below expectations at 2.8%, well under the FOMC members' forecast for the end of 2025 (3.1%)," noted CPRAM.
"This clearly supports a rate cut in December, as well as continued rate reductions into 2026, particularly given the sluggish consumption figures," the asset management firm added.
On the macroeconomic front, investors will be watching for several key data releases this week, including the U.S. trade balance, U.K. industrial production, and inflation in Germany.
As for corporate earnings, market participants are expected to pay close attention to results from Oracle and Broadcom, two major U.S. companies with significant exposure to the artificial intelligence sector.
The only notable data released in Europe this morning was German industrial production, which rose by 1.8% in October compared to the previous month, following a 1.1% increase in September (revised from an initial estimate of 1.3%).
"However, this merely offset the significant decline seen over the summer," cautioned Commerzbank, which added, "After several years of decline, the sector appears to have stabilized, but there are no signs of a recovery yet."
In company news, Ageas climbed 2% in Brussels after signing a framework agreement with BNP Paribas, under which the Belgian insurer will buy back BNP Paribas's 25% stake in AG Insurance, making it sole owner.
Galderma gained more than 1% in Zurich after L'Oréal reached an agreement with a consortium led by EQT to acquire an additional 10% stake in the dermatology specialist.
Salzgitter surged 5% in Frankfurt, benefiting from an upgrade by UBS from "neutral" to "buy" and a price target increase from EUR22.5 to EUR50, with the broker predicting the company will benefit from improved steel prices in the EU in 2026.
