European stocks mostly rise, continuing to gain on Fed rate cut hopes

Published 02/10/2025, 08:12
Updated 02/10/2025, 17:00
© Reuters.

Investing.com - European stocks were mostly higher on Thursday, adding to the previous session’s gains on raised expectations on further Federal Reserve monetary easing.

The DAX index in Germany climbed 1.1%, the CAC 40 in France gained 1.1%, while the FTSE 100 in the U.K. declined 0.2%. 

More Fed cuts ahead? 

The three major European indices posted gains of around 1% on Wednesday, preceding a positive close on Wall Street, after a disappointing ADP employment report added to expectations for quarter-point rate cuts at each of the Federal Reserve’s remaining policy meetings this year.

The U.S. government shut down much of its operations Wednesday after an eleventh-hour spending bill backed by the Republican party failed to clear a Senate vote.

This is set to end the flow of official data for the immediate future, including Friday’s widely-watched nonfarm payrolls report, meaning that investors have focused very closely on the weak ADP number.

Eurozone unemployment rate due 

Back in Europe, a series of central bankers, including ECB Vice-President Luis De Guindos and ECB board member Patrick Montagner, addressed various forums today.

Additionally, the eurozone unemployment rate for August came in at 6.3%, slightly above the previous reading of 6.2%. 

Data released on Wednesday showed that eurozone inflation picked up to 2.2% in September from 2.0% in August, bolstering the case for the European Central Bank to stay on hold for the third straight meeting on Oct 30.

Renault and Chery in partnership talks - Bloomberg

In corporate news, Renault (EPA:RENA) is in the spotlight after Bloomberg reported that the French auto giant and China’s Chery Automobile (HK:9973) are in discussions over a potential partnership to build and sell vehicles in South America.

The talks cover Colombia and Argentina, where Chery would gain access to Renault’s factories in exchange for capital and product design support, the report said.

Crude gives up gains

Oil prices fell Thursday, giving up gains made earlier in the session following the raised potential for tighter sanctions on Russian crude.

Brent futures fell 1.6% to $64.31 a barrel, and U.S. West Texas Intermediate crude futures declined 1.7% to $60.76 a barrel.

Both benchmarks lost about 1% in the prior session, with Brent closing at its lowest since June 5 and for WTI since May 30.

The Group of Seven nations’ finance ministers said on Wednesday they will take steps to increase pressure on Russia by targeting those who are continuing to increase their purchases of Russian oil and those that are facilitating circumvention.

Also, the Wall Street Journal reported that the U.S. will provide Ukraine with intelligence for long-range missile strikes on Russian energy infrastructure, aiming to deprive the Kremlin of revenue and oil.

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