European stock markets are expected to open cautiously on Monday as investors keep a close eye on future central bank policies and economic indicators. At 02:00 ET (06:00 GMT), the DAX futures contract in Germany traded 0.1% lower, CAC 40 futures in France dropped 0.1%, while the FTSE 100 futures contract in the U.K. rose 0.1%.
President Joe Biden’s signing of a bill suspending the U.S. debt limit until the start of 2025 has relieved financial markets of concerns over a potential U.S. default. Now, attention shifts to the decisions of the European Central Bank and the U.S. Federal Reserve regarding interest rate hikes amidst a slowdown in growth.
Although Friday’s U.S. payrolls indicated a strong labor market, wage growth declined, creating uncertainty ahead of the upcoming Fed policy-setting meeting. The International Monetary Fund expects the Fed to continue raising interest rates as banks maintain their lending activities.
In Europe, expectations for further tightening have slightly diminished following the eurozone’s cooling consumer price index (CPI) data last week. On Monday, investors will focus on May’s eurozone producer prices, which are expected to show a significant monthly drop of 3.1%. Additionally, Germany’s trade numbers and PMI data for the European region will be analyzed. ECB President Christine Lagarde is scheduled to speak at a hearing before the Committee on Economic and Monetary Affairs.
In corporate news, UBS announced its completion of the takeover of Credit Suisse, creating a Swiss banking giant with a balance sheet of $1.6 trillion, anticipated to occur as early as June 12.
Oil prices experienced a sharp increase on Monday as Saudi Arabia, the world’s top exporter, pledged additional production cuts from July. This move is expected to tighten the market further in the second half of the year. The announcement coincided with the decision by OPEC+ (OPEC and its allies, including Russia) to extend production cuts into 2024.
By 02:00 ET, U.S. crude futures traded 1.2% higher at $72.58 a barrel, while the Brent contract climbed 1% to $76.92. In other markets, gold futures fell 0.5% to $1,959.55 per ounce, and the EUR/USD currency pair traded 0.1% lower at 1.0697.