European equities had a mixed start to the week as traders considered the potential impact of renewed stimulus from China and upcoming monetary policy meetings from the European Central Bank (ECB) and the Swiss National Bank (SNB).
The German DAX 40 index reached a record high at the opening, driven by news of a shift in China's monetary policy. However, the DAX's momentum was challenged by a disappointing shift in China's monetary policy in September.
Despite these mixed signals, the broader European market showed cautious optimism. In the UK, the FTSE 100 index closed higher, supported by strength in key commodities.
The upcoming ECB meeting is expected to result in a 25 basis point cut to the key deposit rate, and the accompanying statement is anticipated to have a more dovish tone. The ECB will also unveil new economic forecasts. Inflation trends have been lower than expected, and the market has already priced in a rate cut at this week's ECB meeting.
The interplay between inflation, interest rates, and economic growth will be closely monitored, as the ECB's decisions will have global implications. The upcoming ECB meeting and economic indicators will be crucial in determining the trajectory of European equities and market sentiment.