European Markets Extend Weekly Gains Ahead of ECB's Rate Decisions Next Week

Bridgette Randall
24 Jan, 2025
London

European markets struggled to advance in cautious trading on the final trading day of the week as attention shifted to central banks actions next week. 

The European Central Bank and the U.S. Federal Reserve are set to announce their rate decisions next week, and policymakers are likely to consider heightened geopolitical tensions.

The European Central Bank is expected to lower its policy rates by 25 basis points, and investors are hoping that the central bank will signal additional possibilities of additional rates in the near future.

The Federal Reserve is widely anticipated to hold the Fed Funds rate range unchanged amid worries about the resurgent inflation driven in part by higher tariffs on imported goods.

Benchmark indexes in Paris, Frankfurt, Milan, and London meandered after private sector activities in the eurozone unexpectedly expanded in January. 

The HCOB Eurozone Composite PMI increased to 50.2 in January from 49.6 in the previous month, S&P Global noted in the monthly survey released on Friday. 

The expansion in activities was driven by the sustained increase in service sector activities to 51.4 from 51.6, but manufacturing activities continued to shrink, but at a slower pace, 46.1 from 45.1 in December, respectively. 

For the week, the DAX index gained 2.7%, the CAC-40 index advanced 3%, and the FTSE 100 index rose 0.3%. 

 

Europe Indexes and Yields

The DAX index moved higher by 0.3% to 21,472.45; the CAC-40 index jumped 0.9% to 7,966.92; and the FTSE 100 index eased by 0.3% to 8,536.85. 

The yield on 10-year German bonds inched higher to 2.55%, French bonds rose to 3.32%, the UK gilts increased to 4.67%, and Italian bonds edged higher to 3.66%.

The euro edged up to $1.05; the British pound inched up to $1.24; and the U.S. dollar weakened to 90.55 Swiss cents.

Brent crude increased $0.36 to $78.65 a barrel, and the Dutch TTF natural gas rose by €0.17 to €49.91 per MWh.

 

Europe Stock Movers

Ericsson traded flat at 97.62 krona after the Swedish telecom company missed estimates as sales in India remained slow.

4imprint Group Plc gained 0.2% to 5,600 pence after the international direct marketer of promotional products posted a 3% revenue rise in 2024.

Burberry Group Plc surged 15% to 1,233 pence after the British luxury retailer said its third-quarter sales decline was lower than expected, helped by American shoppers.

Givaudan SA dropped 2.3% to CHF 3,849 after the cosmetic ingredients maker lifted its five-year sales target.

Signify NV added 4.3% to €23.72 after the Philips lighting spin-off said fourth-quarter comparable sales dropped by 2.8% due to weakness in Europe and China.