European Stocks Rise as Investors Await Inflation Data and ECB Decision

European stock markets opened higher Monday, with investors focusing on upcoming eurozone inflation data and the European Central Bank’s (ECB) policy meeting. At 03:05 ET (08:05 GMT), Germany’s DAX gained 0.9%, France’s CAC 40 rose 0.2%, and the UK’s FTSE 100 climbed 0.4%.

The ECB is expected to cut interest rates by 25 basis points to 2.50% on Thursday to stimulate the sluggish eurozone economy. Markets anticipate around 90 basis points of rate cuts by year-end, though uncertainty remains due to U.S. tariff risks, a potential Ukraine ceasefire, and increased European defense spending. Inflation data released later today may provide further clarity after signs of slowing price growth in major eurozone economies last week.

Investors are also watching U.S. tariff developments. President Donald Trump has announced additional 10% tariffs on China and reaffirmed plans for 25% levies on Mexico and Canada. However, Commerce Secretary Howard Lutnick stated that the final tariff levels would be determined on Tuesday, leaving room for adjustments.

The European defense sector is in focus as leaders agreed on a peace plan emphasizing increased military spending and a greater role in Ukraine’s defense. Meanwhile, UK-based Bunzl (LON:BNZL) reported quarterly earnings growth, citing an aggressive acquisition strategy, a dividend increase, and a share buyback program.

Oil prices edged higher, supported by strong Chinese manufacturing data. U.S. crude futures (WTI) rose 0.2% to $69.91 a barrel, while Brent gained 0.2% to $72.97. Manufacturing activity in China exceeded expectations, fueled by last year’s stimulus measures.

Meanwhile, uncertainty lingers over a potential Russia-Ukraine peace deal after tensions between Trump and Ukrainian President Volodymyr Zelenskiy, with European leaders reaffirming their support for Ukraine’s defense efforts.