European shares began the week with a modest rise after the benchmark index faced its worst decline in over a year the previous Friday. Investors are awaiting the release of several key economic indicators, alongside the expectation that the European Central Bank (ECB) will reduce interest rates later this week.
The pan-European STOXX 600 index climbed by 0.6% on Monday morning, following its steepest weekly drop since October 2023. Regional stock markets also showed gains, with increases ranging from 0.5% to 1%.
This week, investors will closely examine consumer price inflation data from Germany, Spain, and France. In addition, Britain is set to release employment figures on Tuesday, followed by GDP data on Wednesday. The ECB’s rate decision, anticipated on Thursday, is a key event, with many expecting a 25-basis point rate cut. This move has already been factored into market expectations, with attention shifting towards ECB President Christine Lagarde’s statements about the potential for further cuts in the coming months.
Market participants will also monitor remarks from several ECB officials scheduled to speak at various events this week. Aoifinn Devitt, interim chief investment officer at London CIV, noted the ECB’s readiness to implement consecutive rate cuts but highlighted a cautious approach, suggesting a less aggressive cycle of reductions.
A 1.3% rebound in tech stocks helped lift the benchmark index, following a challenging week for the sector. Travel and leisure stocks performed particularly well, with the sub-index rising by 1.3%, largely driven by a 6.7% surge in British gambling firm Entain’s shares. Meanwhile, Adidas saw its stock fall by 3.5% after a downgrade from Barclays.
In the United States, markets are looking ahead to the release of consumer and producer price data later in the week. Additionally, the first presidential debate between Democrat Kamala Harris and Republican Donald Trump, set for Tuesday, is drawing attention due to its potential impact on global markets, particularly regarding tariffs and international cooperation if Trump is re-elected.
JPMorgan European Discovery Trust plc (LON:JEDT) is an investment trust company. The Investment Trust JEDT objective is to achieve capital growth from a portfolio of quoted smaller companies in Europe, excluding the United Kingdom.
