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European stocks rise; politics, central bank meetings in focus

Published 06/18/2024, 03:12 PM
© Reuters.

Investing.com - European stock markets rose Tuesday, boosted by ebbing worries over regional political turmoil in a week that includes several central bank policy meetings, including from the Bank of England.

At 03:05 ET (07:05 GMT), the DAX index in Germany traded 0.6% higher, the CAC 40 in France rose 0.6% and the FTSE 100 in the U.K. climbed 0.5%.

French stocks make a comeback

Sentiment in Europe has rebounded after the battering the region’s stock markets suffered last week in the wake of the gains from right-wing parties in the European Parliament elections, culminating in French President Emmanuel Macron calling for a snap election.

Opinion polls suggest the far-right National Rally will win the upcoming French election ahead of a left-wing alliance, with President Emmanuel Macron's centrist group trailing in third.

Although this result would be far from ideal as far as most investors are concerned, last week’s drop in the French CAC-40 index of more than 6%, its worst weekly loss since March 2022, has been seen as overdone, with the index making a comeback.

Central bank meetings due

Investors will also be keeping an eye on the final reading of the May consumer price index for the eurozone later in the session, with the annual figure expected to be confirmed at 2.6%, an increase from 2.4% the previous month. 

The European Central Bank cut interest rates by 25 basis points at the start of the month, but uncertainty exists over the time frame for future reductions.

Central banks in Norway, the U.K. and Switzerland are also due to meet this week, where expectations are for the former two to hold steady on rates and for the Swiss National Bank to deliver another 25 basis points of easing.

While the Bank of England is not expected to change its key rates, the voting pattern will be studied for clues of future action. Last month seven members of the Monetary Policy Committee voted to hold, while two voted for a cut. 

The Reserve Bank of Australia kept rates at a 12-year high of 4.35% earlier Tuesday, as widely expected.

Crude slips amid demand concerns 

Crude prices edged lower Tuesday, handing back some of the previous session’s gains, as the global demand outlook remains uncertain amid plentiful supply. 

By 03:05 ET, the U.S. crude futures (WTI) traded 0.2% lower at $79.56 per barrel, while the Brent contract dropped 0.2% to $84.09 per barrel.

Both benchmarks gained around 2% on Monday, closing at their highest since April.

Data released earlier this week showed that China, the world’s largest crude importer, was struggling to produce a solid economic recovery, while the U.S. economy was feeling the weight of prolonged exposure to high interest rates. 


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