European Shares Likely To Open On Sluggish Note Ahead Of Busy Week
European stocks are seen opening on a sluggish note Monday as investors look ahead to key inflation data from the United States and Europe as well as a meeting of oil producers due later in the day week for direction.
After the November FOMC minutes revealed a cautious approach to future rate hikes, traders now await U.S. reports on new home sales, consumer confidence, pending home sales and manufacturing activity this week for additional clues about the outlook for growth and interest rates.
The Commerce Department’s report on personal income and spending may be in the spotlight, as it includes readings on inflation said to be preferred by the Federal Reserve.
The Fed’s favored measure of inflation is expected to slow to its lowest since mid-2021, reinforcing investor optimism that the Fed is done hiking interest rates.
The U.S. GDP second estimate for the third quarter is set to be released on Wednesday.
The Beige Book, a compilation of anecdotal evidence on economic conditions in each of the twelve Fed districts, along with remarks by several Federal Reserve officials, including Chair Jerome Powell’s speech on Friday, could impact the asset markets.
In Europe, European Central Bank President Christine Lagarde addresses the EU parliament later in the day after cautioning that there would be no quick policy easing.
Data on EU consumer prices for November is due Thursday, with analysts expecting further slowdown in both the headline and core rates.
Asian markets traded mostly lower after data showed profits at China’s industrial companies rose at a much slower pace in October than the prior month.
Key purchasing managers index readings for November due on Thursday may offer more cues on business activity after a surprisingly weak batch of PMI readings in October.
Market participants also watched the latest developments in the Middle East after U.S. President Joe Biden said he hopes to extend the pause in the Israeli-Hamas war beyond the original four-day deal to facilitate more hostage releases.
The dollar started the week on a back foot and gold traded firm above the key $2,000 per ounce level, while oil prices fell about 1 percent ahead of an upcoming OPEC+ meeting aimed at agreeing production quotas.
U.S. stocks ended a lackluster shortened trading session narrowly mixed on Friday post the Thanksgiving holiday. Retail shares rose slightly as Black Friday kicked off the holiday shopping season.
The tech-heavy Nasdaq Composite edged down 0.1 percent, while the S&P 500 ended with a positive bias and the Dow inched up 0.3 percent to reach its highest level in well over three months.
European stocks rose on Friday to mark a second week of gains as investors reacted positively to news of temporary pause in fighting in the Middle East.
The pan European STOXX 600 gained 0.3 percent. The German DAX and France’s CAC 40 both rose around 0.2 percent while the U.K.’s FTSE 100 finished marginally higher.
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