European Markets Outlook

European markets edged higher on Friday as investors digested regional economic weakness following the European Central Bank’s latest interest rate cut.

At 06:25 ET (11:25 GMT):
– Germany’s DAX gained 0.4%
– UK’s FTSE 100 rose 0.2%
– France’s CAC gained 0.2%

UK Economy Contracts Again

The UK economy shrank by 0.1% in October, marking a second consecutive monthly contraction, surprising analysts who expected a minor rebound from September's weakness. The contraction intensifies concerns about the region’s economic outlook amid inflationary pressures and elevated borrowing costs.

Simultaneously, German exports fell by 2.8% in October, indicating a delay in the anticipated recovery of external demand. Consumer prices in France were up 1.7% year-on-year in November, aligning with previous readings.

ECB and Other Central Banks Slash Interest Rates

In response to economic weaknesses, the European Central Bank cut interest rates by 25 basis points on Thursday, its fourth cut this year, with potential for further reductions in 2025.

The Swiss National Bank surprised markets with a 50-basis-point cut, while Denmark’s central bank trimmed its rates by 25 basis points.

Munich Re Gains on Strong Guidance

In corporate news, Munich Re (ETR:MUVGn) stock rose over 5% after announcing ambitions for a net profit of €6 billion by 2025, citing robust operational performance.

Conversely, Novo Nordisk (NYSE:NVO) stock fell about 2% as Brits opting for obesity drugs increasingly choose Eli Lilly’s (NYSE:LLY) Mounjaro over Wegovy.

Oil Prices Higher Amid Supply Concerns

Oil prices rose on Friday due to potential supply disruptions from tighter sanctions on Iran and Russia. At 06:25 ET:
– Brent crude futures edged up 1.1% to $74.24 per barrel.
– U.S. West Texas Intermediate crude rose 1.2% to $70.86 per barrel.

Concerns about supply constraints are amplified by sanctions on two of the world’s largest oil producers. However, the International Energy Agency (IEA) expects the oil market to remain well-supplied through 2025, despite rising demand.

(Navamya Acharya contributed to this article.)