European Midday Briefing: Shares Down as Investors Shift From Risky Assets

Adam

Summary:

European markets fell as investors avoided risk ahead of key U.S. data and the Fed’s rate decision. A weaker dollar lifted gold and the euro, while oil rose and Bitcoin dropped.

MARKET WRAPS Stocks:

European shares were down on Monday as investors' attention turned to the upcoming Federal Reserve's rate decision with key data expected to be released this week.

The ISM's manufacturing survey will be released at 1500 GMT today followed by the ISM services report on Wednesday. Other data this week include the ADP's private payrolls report on Wednesday.

"Markets will keep a close eye on this week's releases in light of the still uncertain rate decision [by the Federal Reserve]," Danske Bank said.

Money markets currently price in a 94% probability of a 25bp rate cut in December, according to LSEG.

Investors will also be especially attentive to any news of Trump's nominee for Fed chair. Trump on Sunday declined to confirm that his nomination to replace Jerome Powell will be Kevin Hassett, current director of the National Economic Council.

As December kicked off, investors shifted away from risky assets after Bank of Japan Gov. Kazuo Ueda strengthened expectations for another increase in interest rates later this month.

Shares on the Move

U.K.-listed miners start the new month on the front foot due to continued precious-metals momentum . U.K. miners have been buoyed by precious metals this year, with Fresnillo's share price more-than quadrupling in the year to date.

Stocks to Watch

Richemont can aim for an earnings boost ahead from higher prices and strong sales , Deutsche Bank said. The Cartier owner booked a sharp increase in sales for its most recent quarter, shrugging off lingering drags on the luxury-goods industry.

U.S. Markets:

Stock futures were trading down as December got under way, with contracts tied to the Nasdaq-100 leading declines.

More retailers, including dollar stores, are due to post earnings this week, as is cloud-software pioneer Salesforce.

Forex:

The euro rose to a two-week high against a weaker dollar.

The currency's moves should remain contained even after November eurozone inflation data are released Tuesday, Commerzbank said.

The dollar fell ahead of U.S. economic data that could influence expectations for the Federal Reserve's interest-rate cutting cycle.

Sterling fell as it remains "highly sensitive" to political developments in the U.K. , Tickmill Group said.

"The fallout from the U.K. Budget continues as the Office for Budget Responsibility prepares to release its report today on the early publication of the Economic and Fiscal Outlook," it added.

Bonds:

10-year Bund yields rose in opening trade, tracking Treasury yields. Focus is on headwinds from the Bank of Japan, where rate increases look more likely , Commerzbank Research said.

The outperformance of eurozone peripheral government bonds was set to remain the dominant theme in the eurozone bond market for 2026, supported by stronger fundamentals, improving ratings and resilient flows, Societe Generale said.

Treasury yields rose in early trade as trading resumes after Thanksgiving and a short session last week, awaiting new data to trade on.

The Treasury was expected to postpone testing investor appetite for longer duration debt , Societe Generale said.

"We expect 2026 to be defined by elevated T-bill issuance and steady coupon supply, driven by persistent large deficits and volatile tariff revenues."

Fed rate cuts are seen driving Treasury yields lower by end-2026, the bank said.

Energy:

Oil prices climbed after OPEC+ members decided to leave output steady and as traders monitor geopolitical tensions in Eastern Europe and Venezuela.

OPEC+'s decision to assess the maximum sustainable production capacity of members will likely stir tensions within the group, according to ING.

Metals:

Gold prices rose in early trading on a softer dollar and renewed expectations that the Federal Reserve will cut interest rates further this year.

Precious metals are likely supported by a combination of erratic trading hours on the CME and continued Fed dovishness , Sucden Financial said.

Copper

Copper gained. The market narrative around tightening copper supply is becoming increasingly prevalent, according to Sucden Financial.

Rare Earths

UBS highlighted some reasons why investors shouldn't fret too much about a potential oversupply of rare-earth oxides.

The bank said it was "sympathetic to concerns about oversupply" and acknowledged "a large range of outcomes remained possible."

Iron

Iron ore prices were higher in early trade, but analysts remain bearish on the black metal in the near term. Iron ore's supply-demand dynamics haven't improved , Baocheng Futures said.

EMEA HEADLINES

Airbus Shares Fall After Urgent Fixes Needed on Thousands of A320 Aircraft

Airbus shares fell after thousands of the manufacturer's planes required urgent fixes over the weekend to allow them to fly again.

Shares were 2.4% lower in early European trade Monday.

TotalEnergies to Sell Stake in Nigeria Projects to Chevron

TotalEnergies said it would sell a stake in two oil-and-gas exploration projects offshore Nigeria to U.S. peer Chevron.

Star Deep Water Petroleum, a Chevron subsidiary, will take a 40% stake in the PPL 2000 and 2001 licences located in the West Delta basin, which were awarded to a consortium of TotalEnergies and Nigeria's South Atlantic Petroleum, the French energy major said Monday.

After 'Productive' Meeting With Ukrainian Negotiators in Florida, U.S. Officials Head to Russia

HALLANDALE BEACH, Fla.-U.S. and Ukrainian negotiators said Sunday's meeting on ending the war with Russia-which included talks on possible elections, land swaps and security guarantees-was productive, and top U.S. envoys will head to Moscow on Monday for further discussions.

Secretary of State Marco Rubio, U.S. special envoy Steve Witkoff and President Trump's son-in-law Jared Kushner met with Ukrainian counterparts for more than four hours. Rubio said they made progress, adding that the negotiations are complex.

Vivendi Takeover by Bollore Less Likely After Court Rules in Favor of Billionaire

A French court overturned a ruling that the family of Vincent Bollore had de facto control of Vivendi, quashing investor hopes that the billionaire might be forced into a full takeover of the media group following its four-way spinoff last year.

The country's highest court said Friday that a lower appeals court had made an error in ruling that the family's namesake Bollore holding company exerted de facto control over Vivendi.

GLOBAL NEWS

Rate Hikes Wouldn't Put Brakes on Japan's Economy, BOJ's Ueda Says

NAGOYA, Japan-The Bank of Japan will thoroughly discuss the possibility of an interest-rate increase at its coming meeting, Gov. Kazuo Ueda said, stoking hopes that it will resume monetary tightening this year.

Now that Tokyo's trade agreement with the Trump administration has reduced external risks, the BOJ governor said the central bank will pay special attention to the outlook for wage increases in Japan next year.

Bitcoin Falls as Prospect of Rate Rise in Japan Spooks Investors

Bitcoin fell sharply Monday as investors shunned risky assets after Bank of Japan Gov. Kazuo Ueda strengthened expectations for another increase in interest rates later this month.

The move came against a backdrop of concerns about an overvaluation of tech stocks and other risky assets.

Wall Street Gets Its Groove Back for December. Not Everybody Is Feelin' It.

Wall Street will enter the home stretch of a challenging year in an upbeat mood, having reversed one of the worst November performances in more than a decade with the best week of gains in nearly six months.

A variety of tailwinds appear poised to help stocks power ahead, potentially offsetting risks such as a potential Supreme Court ruling that could disrupt expectations regarding tariffs and increasing caution among retail investors.

Congress Opens Inquiries After Report That U.S. Targeted Boat-Strike Survivors

Congress launched inquiries and lawmakers from both parties raised the possibility of war crimes after a report that the U.S. targeted survivors of a strike on an alleged drug boat.

The Republican-led armed-services committees in the House and Senate said this weekend they are opening bipartisan inquiries, after the Washington Post reported on a Sept. 2 attack on a boat in the Caribbean. In that attack, the Post said, a second strike was ordered to kill two survivors in the water.

After 'Productive' Meeting With Ukrainian Negotiators in Florida, U.S. Officials Head to Russia

How Venezuelan Gangs and African Jihadists Are Flooding Europe With Cocaine

Venezuela has become a major launchpad for huge volumes of cocaine shipped to West Africa, where jihadists are helping traffic it to Europe in record quantities.

Corrupt military officers and drug gangs smuggle shipments by light aircraft, fishing boats, semi-submersible vessels and freighters heading east, international law-enforcement officials have said publicly. The cocaine flows to West Africa, where an informal network of jihadist-linked smugglers and their allies then move the drug north to feed high and rising demand in Europe.

Source: morningstar

To stay updated on all economic events of today, please check out our Economic calendar

News, historical chart data, and fundamental company data are provided by FastBull Ltd.

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.