European Midday Briefing: Shares Mixed as Focus Turns to U.S. Jobs Report, ECB Decision

MARKET WRAPS

Stocks:

European shares were struggling for direction as defense stocks stumbled on Ukraine peace talks and ahead of U.S. economic data releases.

Investors are awaiting the delayed U.S. jobs report for November and partial data for October, to be published at 1330 GMT, for further clues on the Federal Reserve's next policy move. The Fed pointed to a cooling labor market when it cut interest rates last week.

However, the data should be treated with caution as it was collected shortly after the record-long government shutdown , Commerzbank said. "It is therefore to be expected that certain distortions have occurred."

Other U.S. data this week include retail sales on Wednesday and inflation on Thursday.

Investors are also turning their focus to the ECB's last monetary policy meeting of the year on Thursday.

Market participants have recently been increasingly discussing possible interest-rate hikes by the ECB in 2026, and President Christine Lagarde's potential comments on this will be closely watched, State Street Investment Management said.

"It will be crucial whether Lagarde addresses this debate or deliberately contextualizes it," it said. At Thursday's meeting, it also expects the ECB to emphasize its flexibility and rely on further data developments .

"For now, the ECB seems content to stay the course , navigating a delicate balance between growth risks and inflationary pressures," MFS Investment said.

Meanwhile, expectations that the Bank of England will cut its benchmark interest rate at its final meeting of the year this week increased as U.K. joblessness climbed in the three months through October.

"The concerning pace at which the labor market is unravelling means that an interest rate cut on Thursday looks inevitable," ICAEW said.

Shares on the Move

European oil and gas stocks slid in morning trade as oil prices continued to fall on negotiations to end the war in Ukraine. Equinor is down nearly 1%. Shell and BP, as well as Repsol, all fall around 0.6%. TotalEnergies is down 0.4%.

European defense stocks fell steeply after the U.S. offered Ukraine a security guarantee that could help bring the continent closer to peace. Saab is the biggest mover, dropping 6.4%, while Leonardo and Rheinmetall both shed around 4.5%.

U.S. Markets:

Stock futures were down on Tuesday as investors turned their attention to key data.

Indexes have been volatile this month, as worries around the artificial-intelligence boom have knocked technology stocks.

Forex:

The euro remained steady against the dollar, showing little reaction after a weaker-than-expected eurozone purchasing managers' index survey.

The dollar traded steady but stayed near recent lows as investors exercise caution ahead of the U.S. nonfarm payrolls report.

The currency was likely to gradually weaken in 2026 , ANZ said. Geopolitical and policy uncertainties remain and will probably weaken the greenback if they are more U.S.-centric.

Sterling trimmed losses slightly versus the euro after U.K. jobs data showed wage growth exceeded estimates in the three months to October.

The currency could rise if the Bank of England cuts interest rates as expected Thursday but sounds more cautious than anticipated about future cuts, Convera said.

Bonds:

Eurozone government bond yields were little changed at opening.

The 10-year Bund yield fell after Germany's weaker-than-expected flash estimate purchasing managers index.

Treasury yields declined, with the market anticipating that fresh data will confirm labor market weakness.

The focus in Treasurys was on the steepening yield curve as further Fed rate cuts were seen next year, Saxo said.

Energy:

Oil prices fell in early trading, extending the previous session's losses as negotiations to end the war in Ukraine progressed.

Metals:

Gold prices slipped in early trading as investors book profits ahead of key U.S. data that could provide cues on the Fed's policy path next year .

Copper

Copper edged lower. While concerns over the global economy remain, renewed supply disruptions this year and robust demand have boosted sentiment , ANZ said.

Iron

Iron ore was higher in early trading. With macroeconomic events largely priced in, iron ore trading has shifted back toward fundamentals , Nanhua Futures said.

EMEA HEADLINES

Eurozone Business Activity Growth Slows

Business activity in Europe and parts of Asia continued to grow as 2025 drew to a close, but at a slower pace as higher barriers to trade and uncertainty about relations between major powers took their toll.

The eurozone's composite purchasing managers index-based on survey responses from around 5,000 manufacturers and service providers-fell to 51.9 in December from 52.8 a month prior, data firm S&P Global and Hamburg Commercial Bank said Tuesday.

U.K. Unemployment Rises to Pandemic-Era Highs

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The headline rate of unemployment crept up to 5.1% in August-October, from 5.0% in the three months through September, Britain's Office for National Statistics said Tuesday. That matched expectations of economists polled by The Wall Street Journal, last being higher in January 2021 at the height of pandemic-era work stoppages.

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GLOBAL NEWS

Peace Hopes and Data Suspense Send Global Markets, U.S. Futures Down

U.S. futures and global markets were broadly down as peace talks dragged on European stocks and concerns around AI continued to weigh on markets. Investors also await key economic data from the U.S., Europe and Japan, with nonfarm payroll data for October and November expected to land at 1330 GMT. European and U.K. PMIs come ahead of central-bank decisions across the continent Thursday, while the Bank of Japan meets Thursday to discuss a potential rates hike.

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After months of examinations, the attorneys representing Hsieh's father, who has been administering his $500 million estate after his death, detailed their investigation into the documents, which include a will and related letter.

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December 16, 2025 05:18 ET (10:18 GMT)