European stock markets experienced positive momentum on Monday, benefiting from gains in Asian markets and a strong previous week on Wall Street. Investors awaited a speech by European Central Bank (ECB) head Christine Lagarde.
As of 03:35 ET (07:35 GMT), the DAX index in Germany was up 0.6%, the FTSE 100 in the U.K. rose 0.6%, and the CAC 40 in France gained 0.8%. However, trading activity was expected to be limited due to a holiday in the United States.
The positive sentiment in European equity indices was partly driven by the optimism in Asian markets, particularly in China. Chinese markets performed well amid hopes that Beijing’s recent policy measures could pave the way for a significant stimulus package in the near future. This optimism was further bolstered by property developer Country Garden Holdings obtaining bondholder approval to extend certain debt deadlines, averting a potential default. Chinese authorities have been focusing on revitalizing the beleaguered property sector, including increasing local dollar liquidity and loosening some mortgage rules.
The European economy, on the other hand, faced less favorable news. Data released earlier on Monday revealed that German exports declined by 0.9% in July compared to the previous month, reflecting ongoing challenges in global demand.
In Spain, the number of jobless individuals rose by 0.9% in August, leaving a total of 2.70 million people unemployed.
Market participants were keenly awaiting a speech by ECB President Christine Lagarde later in the day. Her comments would be closely scrutinized for insights into potential monetary policy actions at the upcoming ECB meeting later in the month.
In corporate news, Volvo Car’s stock saw a 1.2% increase after the Swedish automaker reported an 18% rise in monthly auto sales for August compared to the previous year, driven by strong demand in Europe and the United States.
Oil prices remained stable at elevated levels on Monday amid optimism that major crude producers would agree to extend output cuts until the end of the year, maintaining tight global supplies. Russia announced plans to outline further supply reductions, adding to expectations that OPEC+ (led by Saudi Arabia) would extend a one million barrel per day cut into October. At 03:35 ET, U.S. crude futures were up 0.1% at $85.58 a barrel, while the Brent contract traded flat at $88.53, with trading volumes light due to the U.S. market holiday.
Lastly, gold futures rose 0.1% to $1,969.75 per ounce, and the EUR/USD currency pair traded 0.3% higher at 1.0804.
