Investing.com – European stock markets edged slightly higher Monday, with activity likely curtailed ahead of the inauguration of US President-elect Donald Trump later in the session.
At 03:05 ET (08:05 GMT), the DAX index in Germany climbed 0.1%, the CAC 40 in France gained 0.3%, and the FTSE 100 in the UK traded 0.1% higher.
Trump’s inauguration looms large
The main focus Monday will be on Donald Trump’s inauguration later on Monday as the 47th US president, with trading ranges and volumes likely to be impacted, especially with the US markets closed for the Martin Luther King Jnr. Day.
This will be his second term in office, and equities mostly rallied after his November electoral victory, as investors bet on deregulation and lower taxes.
There is also a sense of uncertainty after Bloomberg reported that Trump is preparing to declare a national emergency to grant him new powers to enact his agenda.
Trump said he will sign nearly 100 executive orders within hours of taking office and, at a rally on Sunday, repeated vows to deport immigrants, slash regulations and unleash energy resources.
Investors are also wary that Trump will signal higher trade tariffs against China and other major economies, including the European Union.
Back in Europe, the World Economic Forum starts in Davos, Switzerland, this week, with political and business leaders getting together to discuss a wide range of topics, including how to increase economic growth.
Trump is set to address the meeting by video link on Wednesday, while other global leaders are due to attend, including European Central Bank President Christine Lagarde, European Commission President Ursula von der Leyen, UK Chancellor Rachel Reeves and China’s Vice Premier Ding Xuexiang.
German PPI below expectations
German producer pricesrose less than expected in December, rising by 0.8% on the year, below the 1.1% increase expected.
The European Central Bank has cut interest rates four times since June and is expected to continue doing so in the next six months, having seen inflation in the eurozone fall from double digits in late 2022 to just above its 2% target.
The People’s Bank of China left its benchmark loan prime rate unchanged on Monday, a move that was widely expected by markets, with both rates remaining at record lows.
Beijing is likely keeping its powder dry in anticipation of more clarity on Trump’s plans for trade tariffs.
Few earnings reports
In corporate news, there is little in the way of earnings from major companies to digest in Europe Monday.
The reporting season kicked off last week on Wall Street, with big banks reporting higher profits, fuelled by a surge in deal-making and strong equity market performance boosting trading revenues.
Crude slips lower
Oil prices slipped lower Monday, with traders taking risk off the table ahead of Donald Trump’s inauguration.
By 03:05 ET, the US crude futures (WTI) dropped 0.1% to $77.33 a barrel, while the Brent contract fell 0.1% to $80.68 a barrel.
Trump is set to take the reins of office later Monday, and is widely expected to make a series of policy announcements almost immediately. These could include the relaxation of curbs on Russia’s energy sector in exchange for a deal to end the Ukraine war.
Oil has risen by 10% so far this month, amid worries about the impact of more Western sanctions on Russian crude.
