The US Federal Reserve is expected to announce its interest rate decision on Wednesday, with speculations of a rate cut increasingly losing steam.
ADVERTISEMENTEuropean stocks started the week on a weak note, ahead of a slew of economic data expected in the coming days.
Key amongst these is the US Federal Reserve (Fed) interest rate decision, due on Wednesday. Unlike speculations that the European Central Bank (ECB) will start to cut rates soon, investors have very low expectations of the Fed doing the same.
Escalating geopolitical tensions in the Middle East, following a drone attack on US troops in Jordan over the weekend also added to the sombre mood. Although the White House is reported to suspect Iran-backed militias for this, it is unclear what further action could be taken by the US and how this might shake the global economy.
The CAC 40 index was down 0.03% to €7,632.6 on Monday morning, whereas the Stoxx 600 was down 0.02% to €483.7. The FTSE 100 fell 0.05% to £7,641.5 (€8,965.7).
Oil prices inched up following the drone attack, yet they opened the week on a subdued note, with crude oil prices dipping 0.09% to $77.9 per barrel. Brent crude oil prices also dropped 0.08% to $82.8.
Energy stocks rejoice, construction sector crumbles
IT company Thales was one of the top gainers on the CAC 40 index on Monday morning, inching up 1.74% to €137.3, after the company revealed that it would be working with the Hellenic Navy to mid-life modernise their frigates.
France's TotalEnergies rose 1.28% to €60.7, after the company recently took over a German battery storage developer, Kyon Energy.
French engineering group Bouygues dropped 2.50% to €34.3, with the company recently struggling with fire safety shortfalls.
Automobile manufacturer Renault lost 2.29% to €33.6, despite the company reporting that its Morocco factory output rose 9.3% in 2023.
What to watch in the week ahead
France, Germany, Spain, Italy and the Euro area will release their quarter-on-quarter Q4 2023 gross domestic product (GDP) reports on Tuesday.
Wednesday is set to be a busy day: the Fed will announce its interest rate decision on, with the market having very low expectations of a rate cut.
German unemployment and inflation figures for January, as well as retail sales for December, will also be out, as well as France’s January inflation rate and China’s NBS manufacturing purchasing managers’ index (PMI) for January: analysts expect the number to rise slightly to 49.2, up from 49.0 in December.
Alphabet, Microsoft, Apple, Meta, Amazon, Philips and Ryanair are also due to announce earnings this week.
