European stock markets fell this morning, with London down 0.4% and both Frankfurt and Paris down 0.6%, amid ongoing economic stability concerns, particularly in Germany. Donald Trump’s announcement of increased tariffs on imports from China, Canada, and Mexico adds to the uncertainty. Attention is also on the upcoming Federal Reserve meeting minutes and U.S. economic indicators, including housing sales and consumer confidence. In corporate news, Nokia, Roche, and ING made significant announcements today.
European Stock Markets Experience Decline
This morning, the major stock exchanges across Europe faced a downturn, with London reporting a decrease of 0.4%, while both Frankfurt and Paris saw a drop of 0.6%. The ongoing worries about the economic stability of the continent, particularly in Germany, appear to be keeping European markets within a tight range that has persisted for several weeks.
Impact of Tariff Increases and Economic Indicators
Compounding these issues, Donald Trump announced his plans yesterday to raise tariffs on imports from China, Canada, and Mexico, a move that could have repercussions for Europe as well. The U.S. President intends to impose an additional 25% tax on products imported from Canada and Mexico, while goods from China would face an additional 10% tariff.
These developments may overshadow the upcoming release of the Federal Reserve’s meeting minutes from November 6 and 7, which are set to provide insights into the central bank’s stance regarding interest rate cuts and its evaluation of the American economy’s health. Jerome Powell, in recent remarks, emphasized the strength of the U.S. economy, indicating that immediate action is not necessary, although he has not ruled out a rate cut in December.
According to the CME Group’s FedWatch tool, the likelihood of a 25 basis point rate cut in December stands at 56.2%, a decline from 74.6% just a month earlier. Meanwhile, attention will turn to the U.S. housing market later today, with new home sales expected to be announced, reflecting weaker demand due to elevated housing prices and high interest rates.
The afternoon will also see the release of the Conference Board’s confidence index, which may show improvement linked to Trump’s election and the anticipated tax benefits for consumers. On the earnings front, American retailers Abercrombie & Fitch and Best Buy are set to disclose their financial results before Wall Street opens, followed by Dell and HP later in the evening.
In the bond market, the yield on 10-year U.S. Treasury bonds sits at 4.3%, while Germany’s 10-year yield remains stable at 2.21% following a disappointing Ifo business climate index release. In currency trading, the euro has strengthened by 0.2% against the dollar, now valued at $1.051.
Lastly, Brent crude prices in London have risen by 0.8% to $73.7. In corporate news, Nokia has successfully completed a network slicing trial with du, a leading telecommunications provider in the UAE, while Roche has finalized an agreement to acquire Poseida Therapeutics, a clinical-stage biopharmaceutical firm specializing in CAR-T cell therapies. Additionally, ING reported the repurchase of 5,642,295 shares as part of its €2 billion share buyback initiative initiated on October 31, 2024.