European markets are expected to kick off the new trading week on a positive note, following a period of global market uncertainty and volatility. Market optimism appears to be gaining traction despite the tumultuous conditions experienced in recent days, driven by global economic data and geopolitical developments.
Opening Market Expectations
According to data from IG, the U.K.’s FTSE 100 index is predicted to open 32 points higher, reaching 8,711. Meanwhile, Germany’s DAX is forecasted to rise 58 points to 23,092, and France’s CAC is expected to see an increase of 58 points, reaching 8,170. Italy’s FTSE MIB index is set to rise by 186 points, reaching 38,816.
Monday’s trading is expected to begin without major earnings releases or significant data announcements in Europe. This could indicate a quieter day for European markets as investors recalibrate after a volatile week.
A Tumultuous Week Behind Markets
Regional markets wrapped up last Friday in negative territory, marking the end of a week filled with sharp fluctuations. Investors were rattled by a variety of factors, including mixed U.S. tariff policies, the European Central Bank’s latest interest rate cut, and U.S. jobs data that showed a weaker-than-expected increase in nonfarm payrolls. In February, only 151,000 jobs were added in the U.S., far below the anticipated figures, which added to investor concerns about global economic growth.
Geopolitical Concerns and Economic Data Ahead
Asia-Pacific markets were also mixed overnight as traders focused on the upcoming imposition of 25% U.S. tariffs on steel and aluminum imports, set to take effect on Wednesday. The announcement has put steel manufacturers in the spotlight, as they face the impending impact of these tariffs on global trade.
In the U.S., stock futures were slightly lower on Sunday evening as markets braced for a busy week of economic data releases. The February Consumer Price Index (CPI) is scheduled for release on Wednesday, followed by the Producer Price Index (PPI) on Thursday. These data points will be closely monitored to gauge inflationary pressures and potential implications for U.S. Federal Reserve policy.
A Key Geopolitical Meeting
In addition to economic data, geopolitical tensions are expected to take center stage this week, particularly with a high-stakes meeting between U.S. officials and their Ukrainian counterparts in Saudi Arabia. The meeting, scheduled for Tuesday in Jeddah, is seen as an opportunity to assess whether Ukraine is willing to make the necessary concessions in pursuit of a peace deal with Russia to bring an end to the ongoing conflict. The outcome of these talks could have far-reaching implications for both regional and global stability, influencing investor sentiment.
Conclusion
As European markets prepare to open higher, they face a week of economic and geopolitical events that could shape the direction of global markets. While the immediate outlook shows a positive start to the week, the ongoing volatility and the potential impact of the U.S. tariff policies, economic data, and geopolitical developments will continue to weigh on investor sentiment as the week progresses.
