European stock markets traded in a mixed fashion Monday, as investors reflected on a series of central bank interest rate decisions ahead of the release of Germany’s closely watched Ifo Institute survey of business conditions.
At 03:40 ET (07:40 GMT), the DAX index in Germany traded 0.1% lower, the FTSE 100 in the U.K. fell 0.1%, while the CAC 40 in France climbed 0.1%.
Central bank decisions digested
The final week of the third quarter starts with investors digesting last week’s deluge of central bank decisions, which offered up somewhat contradictory results.
While the U.S. Federal Reserve took a hawkish stance, indicating that rates would be higher for longer, its counterparts in Britain and Switzerland surprised markets by halting their rate-hiking cycles.
This followed the previous week’s relatively dovish tone by the European Central Bank, signaling a pause in its rate-hiking cycle in October after raising its main interest rate to a record high 4%.
ECB President Christine Lagarde is scheduled to speak later in the session, and investors will be looking for more clues to indicate that the eurozone’s central bank is done hiking.
Her colleague Francois Villeroy de Galhau said earlier Monday that the ECB has reached the point where it needs to be wary of raising interest rates too high and should try to avoid a hard landing of the economy.
German Ifo business survey due
The health of Germany, the eurozone’s dominant economy, is the main concern, and investors will look carefully at the country’s Ifo Institute survey of business conditions for September later in the session.
Preliminary September consumer price data for the bloc due at the end of this week is also still sure to be on investors’ watchlist.
Aviva to buy AIG’s UK business
In corporate news, Aviva (LON:AV) stock fell 0.4% after agreeing to acquire the UK protection business of AIG (NYSE:AIG) for £460 million (£1 = $1.2245).
Crude rebounds after negative week
Oil prices edged higher Monday, rebounding after their first negative week in four as traders returned their focus to the prospect of tighter supplies going forward.
Both contracts fell last week after a hawkish Federal Reserve stance raised concerns of a hit to economic activity and thus oil demand in the largest consumer in the world.
However, prices remain near their highest levels since November last year on forecasts of a wide crude supply deficit in the fourth quarter in the wake of Saudi Arabia and Russia extending additional supply cuts to the end of the year.
By 03:40 ET, the U.S. crude futures traded 0.7% higher at $90.62 a barrel, while the Brent contract climbed 0.6% to $92.55.
Additionally, gold futures fell 0.1% to $1,943.55/oz, while EUR/USD traded 0.1% lower at 1.0638.
