Stock market: Europe set for a positive start to the week as central banks take centre stage
The quarterly results season continues, with the focus on Big Tech
(Il Sole 24 Ore Radiocor) - European stock markets are set to start the week on a positive note, following a week marked by sell-offs and whilst Asian indices are showing mixed trends. EuroStoxx 50 futures are up 0.4 per cent, whilst FTSE MIB futures are up 0.24 per cent, in line with other European markets. The CAC in Paris is up 0.56 per cent, with the French Parliament currently debating the budget bill. Two key themes will dominate this week: monetary policy, with the major central banks set to decide on interest rates, and the quarterly results season, which continues in full swing. First things first: on Wednesday, the Federal Reserve will hold its meeting, with traders – according to the CME FedWatch Tool – more than 90 per cent expecting the status quo to be maintained, followed by a 25-basis-point rise at the next meeting in December. On Thursday, it will be the ECB’s turn, with the consensus again pointing to interest rates being kept at current levels, whilst on Friday it will be the Bank of Japan’s turn.
Significant financial results are also expected, with Microsoft, Alphabet and Amazon set to report their results between Wednesday and Thursday: the results from US Big Tech firms could shape market sentiment, particularly in the technology sector, which was hit by a heavy sell-off last week due to renewed doubts about the sector’s sustainability following the results from Meta and Tesla. “I think the bar is set high for many companies and, with market sentiment ranging from cautious to negative, it could be a difficult week,” commented Luke Rahbari, CEO of Equity Armor Investments.
Finally, on the political front, following Lula’s victory in Brazil, elections are due to take place in Israel tomorrow, with nearly 7.3 million voters set to decide whether to re-elect Benjamin Netanyahu or bring his political career to an end.
In the currency markets, the euro is trading at 1.119 dollars (unchanged from 1.119 at Friday’s close) and 175.62 yen (unchanged from 175.62). The dollar-yen exchange rate stands at 156.83 (unchanged from 156.83). On the energy front, oil prices are falling following a likely technical correction, after Brent crude closed last week at its highest level since April this year. Consequently, Brent is down 1.47 per cent at $115 per barrel and WTI is trading at $101.3 (-1.9 per cent). Gas prices continue to rise, reaching 96.3 euros per megawatt-hour (+2.6 per cent).
