London, UK – Euro zone inflation climbed to 2.3% in November, surpassing the European Central Bank’s target of 2%. Economists had predicted a 2.3% inflation rate for November.
Senior European economist Fabio Balboni from HSBC anticipates that the ECB will discuss a potential 50-basis-point interest rate cut at their upcoming December meeting but will likely settle for a 25-basis-point reduction. The ECB, known for moving slowly, aims to seek consensus under the leadership of ECB President Christine Lagarde. Balboni suggests that more aggressive rate cuts could be on the horizon next year depending on economic growth data.
British mining company Anglo American saw its shares rise by approximately 3% after Jefferies upgraded its stock rating to buy from hold. European markets, however, opened slightly lower on the day, with the pan-European Stoxx 600 index dipping by 0.2%.
France’s harmonized inflation rate for November remained below 2% at 1.7%, in line with economist expectations and below the ECB’s target. Meanwhile, British insurance firm Aviva has reportedly reached out to Direct Line shareholders, potentially signaling a looming hostile takeover attempt.
Investors are advised to consider tariff-hedging their European portfolios amid the possibility of tariffs on exports to the United States. TS Lombard recommends strategies to mitigate risk, including assessing exposure to the USD value of the U.S. deficit/surplus in goods by country and sector.
In the financial realm, as 2025 approaches, Wall Street experts have identified promising European companies for investment opportunities despite market uncertainties. Morgan Stanley, although having downgraded European equities earlier in the year, emphasizes the diverging performance of equities on the continent.
With European markets expected to open mixed, market participants eagerly await the release of flash euro zone inflation data for November, along with preliminary inflation figures for France and Italy. The outcome of these economic indicators will provide further insights into the region’s economic landscape.