Europe Markets Lack Direction Ahead of Rate Decisions and Busy Week of Earnings and Economic Releases

Bridgette Randall
05 May, 2025
London

European markets diverged in Monday's trading, and investors awaited a busy week of earnings and economic data. 

Benchmark indexes in Frankfurt advanced but fell in Paris, and financial markets were closed in London for a holiday. 

Stock market indexes extended their rebound to the third week in a row amid positive earnings and hopes of a cooling of trade tensions between China and the U.S. 

Investors are also hoping that the U.S. will extend the pause on tariffs on steel and aluminum imports from Europe beyond June. 

The Bank of England is widely expected to cut rates by 25 basis points to 4.25% on Thursday, and investors are anticipating two additional rate cuts totaling 50 basis points in the remainder of the year. 

The U.S. Federal Reserve is expected to hold steady its key fed funds rate range between 4.25% and 4.5%, despite the growing pressure from the White House to lower rates at the upcoming meeting. 

 

Week Ahead

In Europe, investors are looking ahead to the release of the service sector activities, factory orders in Germany, France’s international trade data, and wholesale inflation in the eurozone.

Italy and the euro area are scheduled to release their retail sales reports, and Germany will report on construction, industrial production, and balance of trade as well.

Spain is scheduled to release its industrial production figures, and the U.K. will report on house prices, the Bank of England’s interest rate decision, and industrial and manufacturing production.

Italy is scheduled to release its industrial production data on Friday.

On the earnings front in Europe, investors are looking ahead to results from Ferrari, Phillips, Telenor, UniCredit, Novo Nordisk, BMW AG, Siemens Energy, Infineon Technologies, Commerzbank, Heidelberg Materials, and Swisscom.

 

Europe Indexes and Yields

The DAX index increased by 0.4% to 23,174.75, the CAC-40 index edged lower 0.4% to 7,737.89, and trading in London is closed on Monday.

The yield on 10-year German bonds inched higher to 2.52%, French bonds increased to 3.24%, UK gilts moved down to 4.52%, and Italian bonds edged lower to 3.63%.

The euro increased to $1.13; the British pound was higher at $1.33; and the U.S. dollar was lower and traded at 82.60 Swiss cents.

Brent crude decreased $1.22 to $60.07 a barrel, and the Dutch TTF natural gas was higher by €0.14 to €32.76 per MWh.

 

Europe Movers

Luxury fashion stocks traded higher after China and the U.S. appeared to warm up to start trade negotiations. 

Kering SA decreased 0.6% to €179.62, Hermes International edged up 0.2% to €2,435.0, and LVMH decreased 0.4% to €493.95. 

Banks led broader averages higher ahead of earnings results this week. 

UniCredit SpA decreased 0.8% to €52.22, Commerzbank jumped 1.9% to €24.04, and Intesa Sanpaolo SpA advanced 0.3% to €4.77.