Investing.com - European stocks rose Thursday, continuing the recent positive tone ahead of next week’s expected Federal Reserve rate cut, with eurozone retail sales reported.
The DAX index in Germany climbed 0.9%, the CAC 40 in France gained 0.4% and the FTSE 100 in the U.K. rose 0.2%.
Fed rate cut widely expected next week
European equities traded higher Thursday, with market sentiment underpinned by firm expectations that the U.S. central bank will ease monetary policy next week, following weaker-than-expected U.S. economic data.
The ADP private payrolls report showed a slowdown in hiring, while the ISM services index indicated softer activity in the service sector. The week’s main remaining economic data release will be Friday’s personal consumption expenditures inflation report, which could further influence expectations for Fed policy.
Traders are pricing in roughly a 90% chance of a 25-basis-point cut on Dec. 10, according to CME FedWatch tool.
Eurozone retail sales due
Back in Europe, construction activity data for the eurozone region was reported at 45.4, above the forecast of 45.1. However, most eyes were on the retail sales numbers for October.
Retail sales in the eurozone for October on a monthly basis came in flat at 0% compared to 0.1% seen the prior month. The consensus estimate was 0.1%.
The European Central Bank also meets later this month, but, unlike the Fed, is widely expected to keep interest rates unchanged at its final meeting of the year.
ECB President Christine Lagarde stated on Wednesday that core inflation indicators are in line with the central bank’s target and that inflation will remain close to the bank’s 2% target in the coming months.
She added that the Eurosystem staff projections, which will be released on Dec. 18, will provide more insight into growth and inflation expectations.
Rio Tinto outlines new restructuring strategy
In the European corporate sector, Rio Tinto (LON:RIO) upgraded its 2025 copper production guidance while slashing unit cost forecasts, as part of its new restructuring strategy announced at the miner’s 2025 Capital Markets Day.
SSP Group (LON:SSPG), a leading operator of food and beverage outlets in travel locations, on Thursday reported a resilient financial performance for fiscal year 2025, with revenue rising 6% and underlying operating profit increasing 8.4%.
Frasers Group (LON:FRAS) maintained its full-year profit guidance of £550 million-£600 million despite a 2.8% decline in half-year adjusted profit, as the British sporting goods and lifestyle retailer’s chief executive Michael Murray warned that "excess inventory continues to weigh on the industry, leading to increased promotional activity.”
Aurubis’s (ETR:NAFG) net cash flow surged nearly 30% in fiscal 2024-25, climbing to the highest level in three years, as the German multimetal producer proposed raising its dividend.
Crude gains on Russian supply concerns
Oil prices rose Thursday after more strikes on Russian oil infrastructure raised threats to global supply, adding to the lack of progress in diplomatic efforts to end the war in Ukraine.
Brent futures climbed 1.3% to $63.49 a barrel, and U.S. West Texas Intermediate crude futures rose 1.6% to $59.89 a barrel.
A Reuters report on Wednesday, citing sources, said that Ukrainian forces struck the Druzhba pipeline in Russia’s central Tambov region, reviving concerns over potential disruptions to Russian oil exports.
At the same time, high-level peace talks between U.S. and Russian officials concluded without any breakthrough earlier this week.
