European stocks are anticipated to open on a mixed note Monday, influenced by the Labour Day holiday in the U.S.
Asian stock markets exhibited mixed performances, with declines in Chinese and Hong Kong indices following an official survey indicating that activity in China's manufacturing sector reached a six-month low in August.
A separate private survey reported that China's manufacturing activity rebounded to growth in August. However, a decline in external demand led to new export orders dropping for the first time in eight months, marking the fastest decrease since November 2023.
The dollar remained steady as investors awaited further U.S. economic data for more insight into the Federal Reserve's rate trajectory.
This week, the spotlight will be on the monthly jobs report, alongside other significant reports on manufacturing, service sector activity, and the Federal Reserve's Beige Book.
Money markets are currently pricing in a 25 basis points (bps) rate cut by the Fed in September, with the likelihood of a 50-bps cut diminishing following last week's data.
Gold dipped below $2,500 per ounce in Asian trading, while the dollar held near a two-week high against the euro. Oil prices extended losses amid concerns over China’s demand and indications that OPEC+ will proceed with plans to increase output from October.
Final factory Purchasing Managers’ Index (PMI) readings from Germany, France, and the euro area are expected to influence investor sentiment as the trading session progresses.
U.S. stocks rallied on Friday as recession fears subsided, and the Personal Consumption Expenditures index showed price increases in line with July expectations, bolstering speculation that the Fed might pivot its policy in September.
Data revealed that the Federal Reserve’s preferred inflation gauge rose on a monthly basis from 0.1 percent in June to 0.2 percent in July, while the annual rate remained steady at 2.5 percent.
The Dow Jones Industrial Average rose 0.6 percent to reach a new record closing high, the S&P 500 climbed by 1 percent, and the tech-heavy Nasdaq Composite surged by 1.1 percent.
European stocks saw little change on Friday even as the latest inflation data from the Eurozone and the U.S. strengthened expectations for multiple rate cuts.
The pan-European STOXX 600 ended the session flat with a slight positive bias. Germany’s DAX, France’s CAC 40, and the U.K.’s FTSE 100 all ended the day marginally lower.
