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European equities traded without clear direction on Monday, with investors opting for caution ahead of a pivotal week dominated by major central bank meetings — most notably the U.S. Federal Reserve.
By 03:25 ET (08:25 GMT), Germany’s DAX slipped 0.1%, France’s CAC 40 fell 0.3%, while the U.K.’s FTSE 100 inched up 0.1%.
Fed Rate Cut Expected, But Outlook Remains Uncertain
The Federal Reserve begins its two-day policy meeting Tuesday, with markets widely expecting a 25-basis-point rate cut on Wednesday.
Expectations strengthened following last week’s delayed release of the September core PCE index, which showed softer-than-expected inflation.
According to CME’s FedWatch tool, traders are pricing in an 88% probability of a rate reduction.
However, uncertainty persists over the Fed’s guidance for 2026, given expected internal disagreement over inflation risks, slowing economic momentum, and the health of the U.S. labour market.
Busy Week for Global Central Banks
The Fed is not alone this week.
The Swiss National Bank, Reserve Bank of Australia, and Bank of Canada will also announce monetary policy decisions.
Next week brings decisions from the Bank of England, Bank of Japan, and the European Central Bank, making this a critical period for global interest rate expectations.
Germany Shows Signs of Recovery
Germany delivered a rare upside surprise as industrial production jumped 1.8% in October, far above the expected 0.4% rise.
The data offers a glimmer of hope for Europe’s largest economy, which has struggled under weak global trade and persistent manufacturing headwinds.
However, the German Economic Institute (IW) recently noted the recovery will remain subdued in 2026, forecasting:
- 0.1% GDP growth in 2025 after two years of contraction
- 0.9% GDP growth in 2026 as conditions slowly improve
Unilever Completes Demerger of Ice Cream Division
In corporate news, Unilever (LON: ULVR) shares slipped after the group finalized the spin-off of its global ice cream business.
The newly formed Magnum Ice Cream Company — home to leading brands such as Ben & Jerry’s, Wall’s, and Cornetto — has begun trading with a primary listing on Euronext Amsterdam, alongside secondary listings in London and New York.
