European Shares Seen Up As China Announces Another Rate Cut

(RTTNews) - European stocks may open broadly higher on Monday after the People's Bank of China cut the 14-day reverse repurchase interest rate by 10 basis points to 1.85 percent as part of reductions initiated in July.

The scheduled press conference involving three top financial regulators on the economy due Tuesday is poised to shed light on the government's detailed approach to economic recovery.

In another significant development, U.S. congressional leaders announced an agreement Sunday on a short-term spending bill that will fund federal agencies for about three months and help avert a possible government shutdown.

On the flip side, overall gains may remain capped amid a deepening U.S.-China rivalry and heightened tensions in the Middle East.

The U.S. Commerce Department may prohibit Chinese software and hardware in connected and autonomous vehicles on American roads due to national security concerns, Reuters reported, citing sources.

Israel and Hezbollah have threatened to intensify their cross-border attacks, raising concern of a full-scale war in the Middle East.

Asian stocks traded mixed, with Japanese markets closed for a holiday.

The dollar held steady in Asian trading as investors await a slew of U.S. data, remarks from Federal Reserve officials and the outcome of central bank meetings in Sweden and Switzerland for directional cues.

U.S. reports on durable goods orders, new home sales and consumer confidence are likely to garner investor attention this week along with a report on personal income and spending that includes the Fed's preferred inflation gauge.

A swath of Fed speakers — including regional presidents Raphael Bostic and Austan Goolsbee — are due to speak this week.

Fed Governor Christopher Waller said in an interview on Friday that policymakers still have much room to lower rates over the next six to 12 months, but the pace of reductions in turn would be determined by incoming data on the jobs market and inflation.

According to CME FedWatch, Fed futures traders currently price in 75 bps in rate cuts by the end of this year, and nearly 200 bps in cuts by December 2025.

The Swiss National Bank meets Thursday and markets have fully priced in a quarter-point cut. Sweden's central bank is also expected to ease rates by 25 points when it meets on Wednesday.

S&P Global is set to release September's estimated manufacturing and services PMIs for key eurozone economies, including Germany and France later in the day.

The Eurozone's composite manufacturing PMI is expected to show further contraction in September.

Gold hit a record high in Asian trading, enjoying the momentum generated by the Fed's dramatic interest rate cut last week.

Oil extended gains, after having jumped around 4 percent last week ad Middle East tensions remained in play.

Hezbollah launched more than 100 rockets early Sunday across a wider and deeper area of northern Israel after the country allegedly detonated several electronic devices used by the Lebanese group.

U.S. stocks ended mixed on Friday but logged strong gains for the week following the Fed's aggressive rate cut earlier in the week.

Sentiment was dented a bit after package delivery giant FedEx cut its earnings outlook.

The Dow finished marginally higher to close at a new record high, while the S&P 500 eased 0.2 percent and the tech-heavy Nasdaq Composite shed 0.4 percent.

European stocks ended lower on Friday after a rally in the previous session spurred by the Fed's jumbo interest-rate cut.

The pan European STOXX 600 declined 1.4 percent. The German DAX and France's CAC 40 both lost around 1.5 percent while the U.K.'s FTSE 100 gave up 1.2 percent.