European markets are poised for a modest start, with sentiment wavering as traders anticipate a flurry of central bank announcements. In London, Regent Street dressed for Christmas, while the rest of Europe sets up for a cautious session ahead.
LONDON — Stocks across Europe are expected to open mostly unchanged on Wednesday, as investors await key policy decisions from central banks. The UK’s FTSE index is seen nudging higher, while Germany’s DAX and France’s CAC 40 are projected to hover just below the flatline. Italy’s FTSE MIB looks set to sit about 0.1% lower, according to data from IG.
Market participants will be scrutinizing central banks this week. The European Central Bank is anticipated to hold rates steady at 2% in its final meeting of the year on Thursday, though Lagarde signaled that the ECB may once again lift its euro-area growth forecasts. In September, the ECB raised its forecast for annual GDP growth to 1.2%.
Also in focus will be the Bank of England, the Swedish Riksbank, and Norway’s Norges Bank, all due to deliver their last monetary policy decisions of 2025.
In the U.K., the nine-strong Monetary Policy Committee is expected to cut rates by 25 basis points to 3.75% amid soft growth and signs that unemployment could be edging higher.
Investors will be closely watching November’s UK inflation data released on Wednesday to determine whether disinflation continues. Reuters-compiled forecasts point to an annual inflation rate of about 3.5%, slightly lower than the 3.6% reading for the year to October.
Overnight, U.S. stock futures weakened after the S&P 500 marked a third straight decline on Tuesday as traders weighed the health of the labor market in light of the latest government data. The October and November jobs reports, following a delay caused by the government shutdown, showed a mixed picture: October shed 105,000 jobs, while November added 64,000.
Across the Asia-Pacific region, markets traded mixed on Wednesday as traders digested Japan’s trade figures.
— CNBC’s Liz Napolitano contributed to this market overview.
