Major European stock markets are expected lower on Monday for the first session of a week with unknown multiples, which will be dominated by the monetary policy decisions of the world’s main central banks. Index futures suggest a decline of 0.48% for the Paris CAC 40, 0.51% for the Frankfurt Dax, 0.25% for the London FTSE 100 and 0.56% for the EuroStoxx 50.
The Paris market shed 0.96% last week, its first negative weekly performance after nine consecutive weeks of rebound. If the day’s economic agenda is not very busy, the rest of the week promises to be much more eventful with data on consumer prices in the United States on Tuesday, Fed decisions on Wednesday and then those of the European Central Bank (ECB) and Bank of England, ahead of the publication on Friday of the first results of the PMI surveys on private business activity.
Awaiting new projections from the Fed
As for the Fed, investors are still very much in favor of a rate hike limited to 50 basis points after four consecutive hikes of 75 points, counting on a slowdown in inflation in November to 6.1% per annum. But they also await new projections from the institute’s top management and the speech of its president, Jerome Powell, on the prospects for rate changes in 2023.
Better-than-expected producer price (PPI) figures released on Friday reignited doubts among some, a disappointment that was somewhat tempered by early results from the University of Michigan’s survey of US household sentiment. On Sunday, Janet Yellen, the US Treasury secretary, estimated that inflation is expected to slow significantly in 2023.
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Even the European Central Bank and the Bank of England should opt for a half point rate hike, but once again, in the absence of clear signs of a slowdown in inflation, the markets will look to forecasts for the coming months. Thursday will also be animated by the monetary policy decisions of Switzerland and Norway. In the immediate term, markets continue to observe the development of the COVID-19 epidemic in China, where the easing of restrictions raises fears of an increase in cases of infection.
(with Reuters)
