European flags flutter in front of the European Central Bank (ECB) building prior to a news conference following the meeting of the governing council of the ECB in Frankfurt/Main, Germany, on September 12, 2024.
This is CNBC's live blog covering European markets.
European markets moved slightly lower Thursday, as regional investors await this year's final monetary policy decision from the European Central Bank (ECB).
The pan-European Stoxx 600 index was down 0.11% by 12:25 p.m. London time, as most sectors reversed earlier gains to trade in the red. Retail stocks fell 1.21% while food and beverage stocks ticked up 0.6%.
The central bank is heading for its final interest rate cut of the year on Thursday, with economists expecting a 25-basis-point rate cut rather than the "jumbo" 50-basis-point move that was previously expected. The ECB is also due to release its quarterly macroeconomic projections on growth and inflation.
Get top local stories in Southern California delivered to you every morning. >Sign up for NBC LA's News Headlines newsletter.
The Swiss National Bank also cut rates by 50 basis points earlier in the session Thursday, exceeding expectations of a smaller trim amid an ongoing tussle with depressed inflation and a strong Swiss franc.
It comes as traders continue to digest the latest inflation data out of the U.S. The figures showed that consumer prices rose 0.3% month on month and grew at a 12-month rate of 2.7%, in line with economists' estimates.
Money Report
The producer price index report is due Thursday. The prints mark the last major economic data releases before the Federal Reserve's policy meeting next week.
Traders are still betting that the Fed will cut rates; Fed funds futures are pricing in a more-than 98% likelihood that the central bank lowers rates at that meeting, according to CME's FedWatch Tool.
Overnight, Asia-Pacific markets were mostly higher following post-inflation data gains on Wall Street that saw the Nasdaq Composite top the 20,000 threshold, posting an all-time high and a closing record. U.S. stock futures slid Thursday morning.
Economic policy will dictate German economic growth in 2025, Ifo suggests
The German economy could grow by as little as 0.4% or as much as 1.1% depending on economic policy, the Ifo Institute suggested Thursday.
The Munich-based institute said that "due to major uncertainty," it was outlining two scenarios for the German economy.
"If the German economy fails to overcome its structural challenges, only 0.4 percent growth would be expected. If the right economic policy course is set, growth of 1.1 percent could be achieved in 2025," Ifo said.
Germany has been teetering around a technical recession for some time, with its quarterly gross domestic product alternating between slight increases and slight pullbacks for several quarters. In the third quarter of 2024, Germany's GDP rose 0.1% from the previous three months.
In the 0.4% growth scenario, Germany could experience "creeping deindustrialization," as it becomes less competitive, with companies moving production and investment elsewhere. Productivity growth would remain weak and unemployment could rise temporarily as the economy shifts from industry-focused to services-focused, the Ifo said.
"Slight growth impetus is coming from a slow recovery in private consumption and the construction industry," it noted.
The other scenario includes "more reliable economic policy," which could help manufacturing companies grow production capacity, increase investment and lead to fewer job cuts. Incentives to work would also improve, which in turn could boost private consumption, the Ifo added.
It comes as Germany gears up for an election in February when it's highly likely to see a leadership change. The current opposition party, the Christian Democratic Union, is set to secure the biggest share of votes and so lead a new coalition government which could lead to a policy shift.
— Sophie Kiderlin
Euro higher ahead of interest rate decision
The euro was slightly higher against major currencies at 9:45 a.m. London time (4:45 a.m. ET), ahead of the European Central Bank's announcement at 1:15 p.m.
The euro was up 0.17% against the U.S. dollar at $1.051, and 0.1% higher against the British pound. It jumped 0.52% against the Swiss franc, which showed broader weakness after the Swiss National Bank cut interest rates by 50 basis points.
The euro has nonetheless tumbled against the U.S. dollar in the year-to-date, dropping from $1.104 amid expectations of fewer Federal Reserve rate cuts in 2025 and weak economic forecasts for the euro zone.
— Jenni Reid
Brunello Cucinelli up 6% amid slump in retail stocks
Shares of Brunello Cucinelli rose 6.1% Thursday, despite a wider slump in retail stocks, after the Italian luxury fashion brand raised its annual forecast, projecting 11% to 12% revenue growth for 2024.
Meantime, shares of Zara owner Inditex remained subdued, trading down 2.1%, a day after it disappointed investors with its interim nine-month and quarterly results. The stock closed down 6.5% on Wednesday, dragging the retail sector lower.
— Karen Gilchrist
Swiss National Bank takes leap with 50-basis-point interest rate cut amid franc strength
The Swiss National Bank on Thursday cut its key interest rate by 50 basis points, exceeding expectations of a smaller trim amid an ongoing tussle with depressed inflation and a strong Swiss franc.
The cut takes the bank's main rate to 0.5%. More than 85% of economists polled by Reuters had forecast the bank would implement a 25-basis-point cut.
Read the full story here.
— Ruxandra Iordache
European markets open higher
European markets opened higher on Thursday, as regional investors await the last monetary policy decision from the European Central Bank (ECB) this year.
The pan-European Stoxx 600 index was up 0.14%, with all major bourses and most sectors trading in the green. Oil and gas stocks added 0.92% while media stocks dipped 0.28%.
The U.K.'s FTSE 100 index was 0.14% higher at 8,313, Germany's DAX up 0.23% at 20,444, France's CAC 0.4% higher at 7,451 and Italy's FTSE MIB up 0.51% higher at 34,912.
— Karen Gilchrist
ECB set to poise Europe for growth in 2025 with cut and move signals, Goldman Sachs says
The European Central Bank is set to cut rates by 25 basis points on Thursday and signal further reductions to come, teeing up Europe for stronger economic growth in 2025, according to Goldman Sachs.
"We do think the ECB will go gradually ... but I do think there's going to be some acknowledgement today that rates are headed into a lower direction," Chief European Economist Jari Stehn told CNBC ahead of the decision.
"Lower rates will help somewhat with savings and boosting consumer spending, and that is one reason why we do think Europe will grow next year," he added.
CNBC Pro: Analysts have hiked price targets on these 5 stocks ahead of earnings next month
Analysts have hiked price targets on these 5 stocks ahead of earnings next month
At least ten Wall Street analysts have turned bullish on four of those five stocks ahead of their quarterly earnings reports.
CNBC Pro subscribers can read more here.
— Ganesh Rao
European markets: Here are the opening calls
European markets are expected to open in mixed territory Thursday.
The U.K.'s FTSE 100 index is expected to open 10 points higher at 8,308, Germany's DAX down 12 points at 20,398, France's CAC up 11 points at 7,437 and Italy's FTSE MIB up 67 points at 34,787, according to data from IG.
The European Central Bank and Swiss National Bank both announce monetary policy decisions today. No major earnings are expected.
— Holly Ellyatt
