Investing.com — European stock markets traded higher Monday, with investors cautiously awaiting the latest policy-setting meeting by the European Central Bank later in the week.
At 03:35 ET (07:35 GMT), the DAX index in Germany traded 0.8% higher, the FTSE 100 in the U.K. rose 0.9% and the CAC 40 in France climbed 1%.
The ECB meets on Thursday, and investors are very uncertain of the outcome as price pressures remain elevated while data shows economic activity is now slowing sharply.
The latest illustration of the deteriorating economic outlook is expected to come from Italy later Monday, with industrial production in the eurozone’s third largest economy expected to have fallen 0.3% on the month in July, an annual drop of 1.7%.
Data released last week showed that gross domestic product in the eurozone grew just 0.1% in the second quarter compared to the previous three months, while consumer prices in Germany, the dominant economy in the eurozone, climbed annually 6.1% in August, more than three times higher than the central bank’s medium-term 2% target.
The ECB has raised rates at each of its past nine meetings and policymakers are now debating whether to raise the deposit rate again, to 4%, or pause.
The difficulty the policymakers have is if they feel further tightening is necessary then September is likely the last chance.
«If you cannot get yourself to hike in September, the case will not be stronger in October as economic data will likely worsen, and inflation in September will come lower quite a bit,» said UBS chief European economist Reinhard Cluse.
European investors will also be keeping an eye on the economic events across the pond this week, with key U.S. inflation data due in the form of the latest consumer
Read more on investing.com