European stocks higher; starting new month on positive note

Investing.com – European stock markets rose Friday, extending November’s positive momentum on renewed hope that the European Central Bank has completed its rate-hiking cycle. 

At 03:05 ET (08:05 GMT), the in Germany traded 0.6% higher, the in France traded up 0.7% and the in the U.K. rose 0.5%.

Eurozone inflation in focus

European stocks recorded in November their best month since January, as easing inflation boosted talk that the is done with aggressive rate hikes.

These expectations were added to Thursday after data showed that fell to 2.4% in November, down from 2.9% in October and significantly lower than expected. 

ECB officials have been keen to play down expectations of rate cuts next year, but the new governor of the Bank of Italy, Fabio Panetta, who is also a member of the ECB’s governing council, said on Thursday that the ECB must not cause “unnecessary damage” to the economy and financial stability through sustained high interest rates.

ECB President is set to speak later in the session, ahead of an appearance from Fed Chair Jerome Poweel, and their views on future monetary policy will be studied carefully.

The latest data on in the eurozone is due for release later in the session, and is expected to confirm that this important sector remains firmly in contraction territory in November.

Chinese manufacturing activity rebounds – Caixin PMI

Adding to the positive tone, a private survey showed an unexpected rebound in Chinese manufacturing activity in November.

China’s private unexpectedly rose to 50.7 in November from a 49.5 reading in October, exceeding the 50 mark separating growth from contraction.

However, the reading came a day after an official survey showed a contraction in both manufacturers’ and non-manufacturers’ activity, underscoring problems  in the world’s second largest economy, and a major export market for Europe’s top companies.

Crude slips lower after OPEC+ output reduction

Oil prices retreated Friday, adding to the previous session’s losses, after voluntary oil output cuts agreed by OPEC+ producers fell short of expectations.

By 03:05 ET, the futures traded 0.1% lower at $75.87 a barrel, while the contract dropped 0.2% to $80.71 a barrel. Both contracts lost over 6% each in November, after steep declines on Thursday.

The Organization of Petroleum Exporting Countries and allies, a group known as OPEC+, agreed to a voluntary output reduction of 900,000 barrels per day in addition to extending 1.3 million barrels per day in production cuts already in place. 

While the new cuts are still set to negate a crude oil surplus in the first quarter of 2024, supplies will be less tight than initially anticipated.

Additionally, rose 0.2% to $2,041.60/oz, while traded 0.1% higher at 1.0898.