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European stocks slip ahead of German Ifo; inflation data also in focus

Published 2023-12-18, 03:44 a/m
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Investing.com - European stock markets slipped mostly lower Monday, starting the penultimate week of the year in a subdued manner as investors look to bank recent gains ahead of more key inflation data. 

At 03:35 ET (08:35 GMT), the DAX index in Germany traded 0.4% lower and the CAC 40 in France traded down 0.5%, while the FTSE 100 in the U.K. rose 0.2%.

Key inflation due this week

European equities posted last week their fifth straight winning week, but this new week has started on a subdued note with investors keen to bank gains as the Christmas festivities draw near.

The European Central Bank, and the Bank of England, kept their interest rates unchanged last week, as widely expected, but they were both also keen to point out that their fights against inflation will continue well into the new year.

The latest U.K. inflation release is due on Wednesday, and is expected to show that consumer prices remain more than double the Bank of England's 2% target. 

ECB members Philip Lane and Isabel Schnabel are due to speak later in the session, along with Bank of England Deputy Governor Ben Broadbent.

By contrast, across the pond, the personal consumption expenditures price index, the Federal Reserve’s favorite gauge of inflation, is due on Friday, and is likely to show easing consumer price pressures.

The U.S. central bank signalled last week that its campaign of interest rate hikes is ending and cuts may arrive next year.

German Ifo survey in focus

The main economic data release due in Europe Monday will be the German Ifo survey for December, a gauge of how businesses in the largest economy in the eurozone are performing as the year comes to an end.

Germany's economy shrank slightly in the third quarter compared with the previous three months, dropping 0.1%, and recent business activity data has pointed towards a weak final quarter.

Germany has been among the weakest economies in Europe this year as high energy costs, weak global orders and higher interest rates have taken their toll.

Unilever to sell personal care division

In corporate news, Unilever (LON:ULVR) stock fell 0.6% after the consumer goods giant said it would sell Elida Beauty, its non-core beauty and personal care division, to private equity firm Yellow (OTC:YELLQ) Wood Partners.

The financial terms of the deal were not disclosed, and it is expected to be completed in mid-2024.

Crude boosted by cut to Russian exports

Oil prices climbed strongly Monday, supported by lower exports from Russia and amid growing concerns of oil supply disruption through the Red Sea (NYSE:SE).

By 03:35 ET, the U.S. crude futures traded 0.8% higher at $72.33 a barrel, while the Brent contract climbed 0.8% to $77.13 a barrel. 

Russia said on Sunday it would deepen oil export cuts in December by around 50,000 barrels per day, as the world's biggest exporters attempt to support global oil prices.

Additionally, concerns are growing over the potential for disruption to global supplies as a number of shipping firms said over the weekend that they would avoid the Suez Canal given the increase in assaults on commercial vessels in the Red Seas by Houthi militants in Yemen.

Additionally, gold futures rose 0.1% to $2,0347.45/oz, while EUR/USD traded 0.2% higher at 1.0918.

 

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