European stocks trade higher; UBS gains after completing Credit Suisse takeover

Investing.com - European stock markets drifted higher Monday, at the start of a week dominated by a series of key central bank meetings in the U.S., Asia and Europe.

At 03:20 ET (07:20 GMT), the DAX index in Germany traded 0.6% higher, the CAC 40 in France rose 0.5%, while the FTSE 100 in the U.K. traded 0.3% higher.

Central bank decisions to drive stock markets

European equities edged nervously higher Monday, with investors focusing on monetary decisions this week from three major central banks - the Federal Reserve, the European Central Bank and the Bank of Japan - given there is little in the way of major earnings or economic data due.

The Fed will be the first on show, with its two-day meeting concluding on Wednesday. 

The U.S. central bank is generally expected to pause its year-long tightening cycle, as officials assess the impact of the lifting interest rates to a 16-year high, but with consumer inflation data due on Tuesday there could still be a surprise.

After all, both the Reserve Bank of Australia and the Bank of Canada shocked the markets with interest rate hikes last week.

By contrast, there is more certainty with the other central bank decisions. The ECB has signaled another rate increase is coming on Thursday, while the BOJ is widely expected to stick to its ultra-loose monetary policy at the end of the week.

UBS completes takeover of Credit Suisse

In corporate news, UBS (SIX:UBSG) stock rose 0.8% after the lender announced Monday that it had formally completed the takeover of stricken rival Credit Suisse, creating a giant Swiss bank with a balance sheet of $1.6 trillion and greater muscle in wealth management.

Staying in Switzerland, Novartis (SIX:NOVN) stock rose 1.4% after the pharma giant announced earlier Monday plans to acquire U.S.-based Chinook Therapeutics (NASDAQ:KDNY) for $3.2 billion upfront.

Novo Nordisk (CSE:NOVOb) stock rose 0.7% after the Danish drugmaker announced plans to invest over $2B to expand a production facility in Denmark.

BioNTech (ETR:22UAy) is also in the spotlight as a court case is set to start in Germany, with a woman alleging damaging side effects from the biotech’s COVID-19 vaccine - a lawsuit that could have widespread repercussions.

Iran floats possibility of nuclear deal

Oil prices retreated Monday after Iran’s supreme leader said that Tehran was open to a deal with the West over its nuclear program, potentially flooding the market with additional supply if sanctions on Iranian crude exports are lifted. 

Ayatollah Ali Khamenei said that a deal was possible if Iran’s nuclear infrastructure was kept intact, something that wouldn’t sit easily with Western leaders. 

Both Tehran and Washington denied reports late last week that an interim nuclear deal was close. 

By 03:20 ET, U.S. crude futures traded 1.8% lower at $68.94 a barrel, while the Brent contract dropped 1.7% to $73.53. 

Additionally, gold futures fell 0.2% to $1,973.20/oz, while EUR/USD traded 0.1% higher at 1.0753.