European Shares To Open Lower As Focus Shifts To Central Bank Meetings

European stocks may open on a cautious note Monday as investors seek direction from the latest batch of corporate earnings and key central bank meetings.

The Federal Reserve’s interest-rate decision is due on Wednesday, followed by the European Central Bank (ECB) on Thursday and the Bank of Japan (BOJ) on Friday.

A 25-bps hike in the Fed funds rate is fully priced in, with investors likely to watch for any hints on the central bank’s future moves.

The ECB is also expected to raise borrowing costs by 25 bps and reiterate its commitment to continue the current hiking cycle.

The Japanese yen remains pressured amid expectations that the BOJ will not make any changes to its ultraloose monetary policy.

As U.S. recession fears ease, reports on consumer confidence, new home sales, durable goods, second quarter GDP and personal income and spending are also likely to attract attention this week.

On the earnings front, Google parent Alphabet, Microsoft and Meta Platforms are among the prominent companies that will unveil their quarterly earnings this week.

The day’s European economic calendar remains light, with flash purchasing managers’ survey results from the euro area and the U.K. due later in the session.

Asian markets traded mostly higher in cautious trade, with all eyes now on China’s Politburo meeting due later in the week.

Gold slipped on a firmer dollar and bond yields held steady while oil prices were subdued following last week’s rally on signs of steady U.S. crude demand and amid bets on more stimulus in major importer China.

U.S. stocks ended a lackluster session narrowly mixed on Friday as a large volume of index and stock options expired.

The Dow Jones Industrial Average edged up marginally to notch its 10th straight day of advance, marking its longest rally in almost six years.

The S&P 500 also ended marginally higher, while the tech-heavy Nasdaq Composite eased 0.2 percent ahead of a rebalance of the Nasdaq 100 index.

European stocks ended Friday’s session broadly higher ahead of a busy week of central bank meetings and earnings releases.

The pan European STOXX 600 gained 0.3 percent. The German DAX slipped 0.2 percent, while France’s CAC 40 rose 0.7 percent and the U.K.’s FTSE 100 edged up 0.2 percent.

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