European markets opened the week on a quiet note on Monday, with major indexes edging slightly lower as global investors turned their attention to the U.S. Federal Reserve’s highly anticipated policy decision. The pan-European Stoxx 600 traded just below the flatline in early hours, reflecting cautious sentiment across the region. Key markets including the CAC 40, DAX, and FTSE MIB all recorded mild declines, while London’s FTSE 100 managed to hold steady with a marginal gain.
The mood across trading floors is dominated by expectations that the Federal Reserve will announce a 25-basis-point rate cut at its final meeting of the year. According to the CME FedWatch tool, traders are pricing in an 87% probability that the central bank will ease rates on Wednesday. The outcome will likely set the tone for several major central banks preparing for their final policy meetings of 2025, including the Swiss National Bank this week and the Bank of England and European Central Bank next week.
Across sectors, defense stocks outperformed, lifting parts of the broader European benchmark. Shares of Renk, Rheinmetall, and Hensoldt topped the index with gains ranging from 2% to 5%. Geopolitical developments added further interest, as outgoing U.S. Ukraine envoy Keith Kellogg indicated that negotiations to end the war in Ukraine were “really close,” with only the Donbas region and the Zaporizhzhia nuclear plant left as major hurdles.
In corporate news, Unilever’s highly anticipated ice cream spinoff officially began trading on Monday. The new company — The Magnum Ice Cream Company — which includes brands like Ben & Jerry’s, Cornetto, and Wall’s, debuted with a reference price of €12.80 in Amsterdam, with secondary listings in London and New York. Despite the launch, Unilever’s shares slipped 4% in early trading.
Globally, sentiment remained mixed. Asia-Pacific markets traded unevenly following stronger-than-expected export data from China, while U.S. futures hovered near flat after Friday’s softer core PCE inflation reading. With few major earnings on Europe’s schedule for the day and Germany set to release industrial production figures, markets remain firmly focused on the Fed’s decision — a move that could shape global financial conditions heading into the new year.
source: cnbc