By Peter Nurse
Investing.com - European stock markets weakened Monday, with investors wary ahead of a series of central bank meetings this week, including the Federal Reserve, which are expected to result in further monetary tightening.
The main focus this week will be on the two-day U.S. Federal Reserve meeting, starting on Tuesday, which is widely expected to result in another 75 basis point interest rate hike.
There remains the U.S. inflation , and this is likely to weigh ahead of Wednesday’s official announcement.of a surprise 100 bps hike by the Fed, given the stubbornness of
The Fed isn’t the only central bank in play this week.
The Bank of England meets on Thursday, with its gathering delayed by a week after the death of Queen Elizabeth II, and is expected to hike rates by another 50 basis points. This comes ahead of a mini-budget by the new Chancellor of the Exchequer Kwasi Kwarteng on Friday.
Today’s weakness is occurring despite the news that the People’s Bank of China cut a repo rate and also increased cash injections into the economy, with the central bank seeking to boost growth in the second largest economy in the world, a major regional growth driver, which has been hit hard by COVID-19 lockdowns.
The economic data slate is largely empty Monday, but the first look at European business activity in September comes on Friday with the release of PMI data from the Eurozone and the U.K.
Economists polled by Bloomberg now put the probability of two straight quarters of contraction at 80% in the next 12 months, up from 60% in a previous survey.
In corporate news, Volkswagen (ETR: VOWG_p ) stock rose 1.1% following the news the auto giant is targeting a valuation of up to 75 billion euros ($75.1 billion) for luxury car maker Porsche, in what will be Germany's second-largest initial public offering in history.
Oil prices weakened Monday, overturning earlier gains as fears of a global recession caused concerns that fuel demand growth will slow.
The market has edged higher earlier Monday after China had started easing curbs in Chengdu, a southwestern city of more than 21 million people and the biggest city to face lockdowns after Shanghai earlier this year.
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