(Bloomberg) — European stocks ticked lower as traders geared up for a week of political risks and inflation data which may help guide bets on the outlook for global interest rates.

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The Stoxx 600 Index slipped 0.1%, while US futures traded little changed. Most Asian equity benchmarks declined and a gauge of dollar strength was steady. The Japanese yen was below 160 per dollar as top currency official Masato Kanda said authorities are ready to intervene to support it 24 hours a day, if needed.

Investors will be closely monitoring the first US presidential debates scheduled this week, while the first round of voting in the French legislative election is set to take place this weekend.

Markets are at a critical juncture for positioning into the second half of 2024 with the outlook for central-bank policy rates from New Zealand to Japan and the US unclear. Inflation prints in Australia and Tokyo, as well as the Federal Reserve’s preferred gauge of consumer costs, may yield clues, but political risks loom large.

“How the US dollar trades into month-end will be important to the direction of risk across markets,” said Bob Savage, head of markets strategy and insights at BNY Mellon in New York. Political developments from the US to France in coming days will “set the tone for fiscal risks.”

Later this week, the Federal Reserve’s favored inflation yardsticks are poised to show the tamest monthly advances since late last year — which may pave the way for officials to begin lowering interest rates. Treasury 10-year yields were steady.

US equities fell on Friday, and traders and strategists began to question how long this year’s rally can persist given shifting bets on central bank rate cuts and election uncertainties in Europe.

The S&P 500 Index has likely logged most of the gains it will see this year as investors are growing increasingly nervous about the stock market’s rich valuations, according to the latest Bloomberg Markets Live Pulse survey published on Monday.

Signs of skittishness are evident as about half of survey takers say stocks will see the beginning of a correction of at least 10% this year.

“The bottom line is that the ongoing policy mix of heavy fiscal spending and tight interest rate policy is crowding out many companies and consumers in way that is unsustainable,” Morgan Stanley strategist Michael Wilson wrote in a note. “Investors have recognized this outcome by bidding up the few stocks of the companies that are doing well in this environment.”

In commodities, oil extended the previous session’s decline toward $80 a barrel amid a stronger greenback and a technical indicator suggesting the recent rally has gone too far.

Key events this week:

  • BOJ issues Summary of Opinions from June policy meeting, Monday

  • Singapore CPI, Monday

  • Taiwan jobless rate, industrial production, Monday

  • Argentina unemployment, GDP, Monday

  • Bank of Canada Governor Tiff Macklem speaks, Monday

  • San Francisco Fed President Mary Daly speaks, Monday

  • Fed Governor Christopher Waller speaks, Monday

  • Australia consumer confidence, Tuesday

  • Malaysia CPI, Tuesday

  • Canada CPI, Tuesday

  • Spain GDP, Tuesday

  • US Conference Board consumer confidence, Tuesday

  • Fed Governor Lisa Cook, Fed Governor Michelle Bowman speaks, Tuesday

  • Australia CPI, Wednesday

  • UK Prime Minister Rishi Sunak and Labour leader Keir Starmer debate, Wednesday

  • Bank of Finland’s 3rd International Monetary Policy Conference begins, Wednesday

  • RBA Deputy Governor Andrew Hauser speaks, Thursday

  • Japan retail sales, Thursday

  • Philippines rate decision, Thursday

  • China industrial profits, Thursday

  • Eurozone economic confidence, consumer confidence, Thursday

  • BOE releases financial stability report, Thursday

  • Sweden rate decision, Thursday

  • Turkey rate decision, Thursday

  • US durable goods, initial jobless claims, GDP, wholesale inventories, Thursday

  • Mexico unemployment, trade, rate decision, Thursday

  • Japan Tokyo CPI, unemployment, industrial production, Friday

  • UK GDP, Friday

  • France CPI, Friday

  • Italy CPI, Friday

  • Spain CPI, Friday

  • Czech Republic GDP, Friday

  • US PCE inflation, spending and income, University of Michigan consumer sentiment, Friday

  • Richmond Fed President Thomas Barkin speaks, Friday

  • Brazil unemployment, Friday

  • Chile industrial production, unemployment, Friday

  • Colombia unemployment, rate decision, Friday

Some of the main moves in markets:


  • The Stoxx Europe 600 fell 0.1% as of 8:02 a.m. London time

  • S&P 500 futures were little changed

  • Nasdaq 100 futures were little changed

  • Futures on the Dow Jones Industrial Average were little changed

  • The MSCI Asia Pacific Index fell 0.3%

  • The MSCI Emerging Markets Index fell 0.5%


  • The Bloomberg Dollar Spot Index was little changed

  • The euro rose 0.1% to $1.0706

  • The Japanese yen was little changed at 159.69 per dollar

  • The offshore yuan was little changed at 7.2886 per dollar

  • The British pound was little changed at $1.2652


  • Bitcoin fell 2.2% to $62,319.75

  • Ether fell 2% to $3,365.64


  • The yield on 10-year Treasuries was little changed at 4.25%

  • Germany’s 10-year yield was little changed at 2.40%

  • Britain’s 10-year yield declined one basis point to 4.07%


This story was produced with the assistance of Bloomberg Automation.

–With assistance from Aya Wagatsuma.

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