European markets open lower as investors await key central bank decisions

European stock markets are set to open lower on Tuesday, giving back early-week gains as investors brace for a packed schedule of central bank decisions and major economic data releases. The cautious mood reflects growing uncertainty over interest rate paths and global growth expectations heading into the final weeks of the year.

Market forecasts suggest a subdued open across the region, with the U.K.’s FTSE expected to slip 0.25%, Germany’s DAX down 0.63%, France’s CAC 40 lower by 0.37%, and Italy’s FTSE MIB easing 0.33%, according to IG data. Traders appear reluctant to take bold positions ahead of policy announcements that could reshape market sentiment.

Attention is firmly on the European Central Bank, which holds its final policy meeting of the year on Thursday. While interest rates are widely expected to remain at 2%, ECB President Christine Lagarde has signaled that the bank may once again raise its growth forecasts, after previously lifting its annual GDP outlook to 1.2% in September.

Elsewhere, the Bank of England, Sweden’s Riksbank, and Norway’s Norges Bank are also due to announce their final monetary policy decisions for 2025 this week. The Bank of England, in particular, faces a close call, with markets leaning toward a modest rate cut. Fresh inflation figures for both the euro zone and the U.K., due Wednesday, could further influence expectations.

Beyond monetary policy, political developments are also in focus. European leaders will meet in Brussels on Thursday to discuss continued funding for Ukraine, including proposals to use frozen Russian assets to support a €210 billion loan package. Meanwhile, global sentiment remains fragile after Asia-Pacific markets declined overnight and U.S. investors await key labor and retail data that could set the tone for markets worldwide.

source: cnbc