European Shares May See Tepid Start As Investors Await ECB Comments

European stocks are likely to open on a sluggish note Monday as investors await the release of U.S. inflation report later this week for more clarity on the Federal Reserve’s rate path.

U.S. reports on personal income and spending, durable goods orders, housing starts and new and existing home sales due this week may also shed more light on the U.S. economic and rate outlook.

Gold ticked higher as benchmark US 10-year Treasury yields hovered near their lowest level since July on increased bets of a Fed rate cut in March.

The Japanese yen struggled for direction as the Bank of Japan began a two-day policy meeting amid speculation it might announce a shift away from its ultra-loose monetary policy.

Asian markets traded mostly lower after New York Fed President John Williams pushed back against market bets of multiple rate cuts next year, reiterating the U.S. central bank remains focused on bringing inflation down to its 2 percent target.

Property developers fell in China and Hong Kong after China South City Holdings warned it doesn’t have the resources to pay the interest of its 9 percent notes due July 2024.

Oil prices rose, extending last week’s gain as major shipping lines suspended transit through the Red Sea after missile attacks by Yemeni Houthi rebels.

The day’s European economic calendar remains light, with German IFO business climate data as well as speeches by ECB Chief Economist Philip Lane and Executive Board member Isabel Schnabel likely to garner investor interest.

U.S. stocks ended mixed on Friday but logged seventh week of gains after a deluge of central bank meetings and economic data releases.

Economic data signaled an uptick in U.S. business activity in December and mixed fortunes for the manufacturing sector.

The Dow edged up 0.2 percent to touch another new record closing high and the tech-heavy Nasdaq Composite added 0.4 percent to hit a nearly two-year closing high while the S&P 500 ended flat with a negative bias.

European stocks also ended mixed on Friday after cautious ECB and BoE comments and weak euro area service sector data.

The pan-European STOXX 600 ended marginally higher. The German DAX finished marginally lower and the U.K.’s FTSE 100 lost about 1 percent while France’s CAC 40 rose 0.3 percent.

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