(Bloomberg) — European stocks were muted as investors looked ahead to central banks’ decisions as President Donald Trump continues to ramp up tariffs threats.
The Stoxx Europe 600 Index was little changed as of 8:15 a.m. in London. The energy and healthcare were the top-performing sectors, while consumer products lagged. Shipping stocks including AP Moller-Maersk A/S, Hapag-Lloyd AG gained as the US vowed strikes on the Yemen-based Houthi militants over Red Sea vessels attacks.
Over the weekend Trump reinforced tariff threats, saying that he would be imposing both broad reciprocal and additional sector-specific tariffs on April 2. Traders will be watching the Federal Reserve interest rate decision due later Wednesday for signs of support after Treasury Secretary Scott Bessent dismissed the market’s recent decline as healthy.
“Given uncertainty around tariffs and the looming Fed meeting later this week, investors seem to remain on the sidelines for now,” Joachim Klement said head of strategy, economics and ESG at Panmure Liberum.
Traders will likely shift their attention to US retail sales and manufacturing data due later Monday, which will shed more light on the state of the world’s biggest economy.
Other central banks, including the Bank of England and Sweden’s Riksbank, are likely to keep policy on hold this week, while the Swiss National Bank and the South African Reserve Bank may cut rates by 25 basis points.
While US futures continue to dip, European stocks are holding up better. Germany’s reform of the debt brake – the first step to allow a flood of additional fiscal spending – continues to support European markets’ outperformance.
That optimism will hinge on Tuesday’s vote in Germany’s parliament to push through the spending package – where anything other than success would be a major downside risk for stocks.
Read: Stakes Are High for Germany to Deliver on Spending: Taking Stock
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–With assistance from Michael Msika.
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