European equities are expected to commence trading with mixed performance on Monday, as investors brace for the pivotal U.S. presidential election on Tuesday, followed by the Federal Reserve's interest rate decision on Thursday.
Recent polling indicates that Vice President Kamala Harris and former President Donald Trump are closely matched in the race for the presidency. This election will also determine whether the incoming president will face a cooperative or oppositional Congress. A divided control of the U.S. House of Representatives and Senate would likely maintain the current political landscape.
The U.S. Federal Reserve is set to reveal its interest rate decision on Thursday, with Chair Jerome Powell scheduled to address the press afterward. Market consensus anticipates a 25 basis point rate reduction by the central bank, in response to conflicting economic signals, following the substantial 50 basis point cut in September.
In Asia, stock markets experienced modest gains amid cautious trading, with Japanese markets remaining closed due to a national holiday. The dollar experienced a significant drop from recent peaks after Friday's weaker-than-anticipated nonfarm payrolls data suggested a cooling labor market.
Throughout the week, a range of U.S. economic indicators, including reports on factory orders, service sector activity, and consumer sentiment, are likely to capture the investors' attention. In Asian trading, gold saw a minor uptick following Iran's threat to deploy powerful warheads and other weaponry against Israel in forthcoming attacks.
Oil prices rose by nearly 2 percent as OPEC+ decided to postpone the planned increase in oil output set for December by a month.
U.S. stock indices concluded Friday's trading session positively, buoyed by favorable earnings from Amazon and Intel, which helped investors overlook the disappointing jobs report. Data revealed that the U.S. economy added a mere 12,000 jobs in October—the lowest rate of job creation since December 2020—affected by hurricanes and labor strikes. The unemployment rate remained at 4.1 percent, matching expectations.
On Wall Street, the technology-focused Nasdaq Composite increased by 0.8 percent, the Dow Jones Industrial Average rose by 0.7 percent, and the S&P 500 gained 0.4 percent.
European stocks also ended on a high note on Friday, thanks to robust corporate earnings announcements. The pan-European STOXX 600 advanced by 1.1 percent, with Germany's DAX up 0.9 percent, and France's CAC 40 and the U.K.'s FTSE 100 both increasing by approximately 0.8 percent.
