Oil Pressures Energy, European Markets Enter Caution Mode
European stocks traded flat and lacked momentum as investors stayed on the sidelines ahead of key US employment data. The Stoxx Europe 600 was little changed in early London trading, with markets looking for fresh clues on the Federal Reserve’s rate path and the overall health of the US economy.
Sector performance was mixed. Utilities and industrials led modest gains, while energy and banking lagged. Energy shares slipped after Donald Trump said Venezuela would send around US$2.8 billion worth of oil to the US, reviving concerns over additional supply at a time when oversupply sentiment is already weighing on crude.
In single-stock moves, Lufthansa stood out, rising about 2% after Morgan Stanley upgraded the airline. The call was seen as a vote of confidence that Lufthansa’s recovery plan is gaining traction, even as the broader market remains in a wait-and-see stance.
Overall, European equities started the year on a strong footing, helped by buying in defense and mining names. However, that early momentum has cooled as attention shifts toward US macro releases—often a key driver of expectations around whether rate cuts will be brought forward or pushed back.
Beyond the US data, investors are also watching the Eurozone’s December inflation report due today. Another soft reading would reinforce the view that disinflation is continuing, potentially supporting expectations for a more accommodative policy outlook—though the pace of any shift remains heavily tied to incoming US data.
Source: Newsmaker.id
