Manufacturing PMI data for Eurozone, Germany, France, UK, Italy; EuroCOIN indicator of euro area economic activity; update from Ryanair
European stock futures point to losses at the start of the week. Major Asian stock benchmarks were mixed in holiday-thinned trading; Treasury yields fell; the dollar weakened slightly; while oil and gold gained.
Shares in Europe look set to decline at the open on Monday as further turbulence is likely.
U.S. stocks fell Friday, closing out a losing week, month and quarter as investors wrestled with more signs of persistently high inflation.
With the Fed signaling it is committed to bring inflation under control, investors have grown fearful that its campaign of rate increases will meaningfully slow the economy.
"In the trade-off between growth and inflation, the Fed is going to choose inflation," said Desmond Lawrence, senior investment strategist at State Street Global Advisors. "That's what's really giving you the choppiness that we've had in the past week in particular."
Read: Stocks and bonds are 'discounting for a disaster' after the worst stretch for investors in 20 years
The dollar pulled back slightly, though USD is likely to be supported.
Financial-market turmoil has yet to abate even after the BOE stepped in with an emergency bond-purchase program, which may put downward pressure on major currencies such as GBP, MUFG Bank said.
Read: A rampaging U.S. dollar just booked its strongest quarter in at least 7 years as investors search for safety
Treasury yields declined early Monday in Asia, after finishing the New York session on Friday with their biggest multiquarter rise in at least a quarter-century, as investors positioned for aggressively higher interest rates this year.
In comments made at a conference in New York on Friday, Fed Vice Chair Lael Brainard said policy makers won't pull back from rate hikes prematurely and that it will take time for high interest rates to bring inflation down.
Data released Friday underscored her point. While the personal consumption expenditure gauge of U.S. inflation rose a mild 0.3% in August, another measure that omits volatile food and energy costs jumped 0.6% last month - above Wall Street's 0.5% forecast for core PCE - in a more worrisome sign. The rate of inflation over the past year slowed to 6.2% from 6.4% in the prior month. However, the core rate of inflation in the past 12 months climbed to 4.9%.
Read: Battered Investors Now Find Thrills in T-Bills
Oil futures climbed in Asia on prospects that OPEC+ may cut production.
The group is poised to consider on Wednesday a cut of more than 1 million barrels a day to help support declining oil prices, according to delegates in the group.
Other options being considered include a smaller reduction of 500,000 barrels a day or as much as 1.5 million barrels a day, the delegates said.
Gold prices edged higher early Monday amid prospects for lower Treasury yields and an improving China outlook.
Things are beginning to look better for the precious metal, said Oanda's Edward Moya.
Wall Street seems confident that the Fed's tightening might be close to a peak, while China has taken moves to support the housing market and Beijing might be closer to making a gradual adjustment to its zero-Covid policy, Moya added.
Copper futures declined, pulling back from last week's gains.
However, ANZ said the metal may be getting some support after an earlier selloff pushed down prices, while rising supply concerns could keep buying interest high after the London Metal Exchange said it was looking at blocking Russian metal from being delivered to its network of warehouses.
"This could have significant ramifications" as Russia is a major copper producer, ANZ noted.
TODAY'S TOP HEADLINES
OPEC+ to Weigh Production Cut to Bolster Oil Prices
OPEC+ is set to consider Wednesday its most drastic reduction of production since the pandemic in order to help prop up falling oil prices, a move that could put pressure on global economic growth.
The Organization of the Petroleum Exporting Countries and Moscow-led allies, collectively known as OPEC+, is considering a cut of more than 1 million barrels a day, delegates in the group said.
U.K.'s Central Banker Faces Inflation, a Financial Crisis and His Own Government
LONDON-In late August, Bank of England Gov. Andrew Bailey was at a symposium in Jackson Hole, Wyo., when a New York University economist flagged a problem. In a world where central banks are quickly raising interest rates to calm inflation, they might face an unexpected crunch in financial markets and need to flood them with liquidity to prevent a market meltdown.
Mr. Bailey, a bookish, soft-spoken Brit, stood up in the hall and said such an about-face would be a tough sell to investors and the public since it would undermine the fight against inflation. It "is a very difficult message to get across to the outside world," he said.
Cargo Shipowners Cancel Sailings as Global Trade Flips From Backlogs to Empty Containers
Ocean carriers are canceling dozens of sailings on the world's busiest routes during what is normally their peak season, the latest sign of the economic whiplash hitting companies as inflation weighs on global trade and consumer spending.
The October cancellations are a sharp reversal from just a few months ago, when scarce shipping space pushed freight rates higher and carriers' profits to record levels. Last October, companies like Walmart Inc. and Home Depot Inc. were chartering their own ships to get around bottlenecks at ports to meet a surge in demand for imports.
Central Banks' Higher Rates, Bond Sales Clash With Government Needs
FRANKFURT-Central banks and governments are on a collision course.
For 15 years, central bankers around the world worked hand in glove with elected leaders to bolster economic growth and inflation.
Inflation Keeps the U.S. From Stepping In to Slow Dollar's Rapid Rise
WASHINGTON-U.S. policy makers aren't likely to take action to slow the dollar's rapid rise despite rising risks of global financial turmoil, analysts say, largely because a strong greenback helps fight domestic inflation.
The U.S. dollar has soared in value as the Federal Reserve raises interest rates to fight the highest U.S. inflation in decades and investors move money into dollar-denominated assets. The WSJ Dollar Index, which measures the dollar against a basket of other currencies, is up roughly 16% so far this year.
U.K. Prime Minister Liz Truss Admits Mistake in Communicating Economic Plan
LONDON-U.K. Prime Minister Liz Truss said that her government could have done a better job preparing financial markets for a surprise tax-cut plan funded by increased debt, but otherwise defended the package of economic measures.
"We should have laid the ground better," Ms. Truss said in an interview with the British Broadcasting Corp. on Sunday. It was her first acknowledgement that her signature policy since taking office last month had fallen flat among investors, voters and some members of her own party.
Probe Into Nord Stream Pipeline Damage Faces Hurdles at Sea, Ashore
When Bjorn Lund's team at the Swedish National Seismic Network first recorded tremors in the Baltic Sea, it didn't initially notice anything unusual.
The area, off the coasts of Denmark and Sweden, is used for naval exercises by both countries. The institute, part of Uppsala University, regularly records the impact of explosive blasts there.
Credit Suisse Seeks to Calm Market Jitters
Credit Suisse Group AG tried to assuage fears about its health in a memo to employees and in a round of phone calls to investors and clients over the weekend, according to people familiar with the matter.
Credit Suisse shares are down 21% this month and spreads on its credit-default swaps, a type of insurance against default, rose to their highest level of the year on Friday. The deteriorated market condition indicates that Credit Suisse could struggle to raise new shares to pay for a planned restructuring and that its funding costs could rise sharply.
Rio Tinto Calls for ERA Chairman to Resign
SYDNEY-Rio Tinto PLC said it is seeking the resignation of the chairman of Energy Resources of Australia Ltd., citing differences over the approach to rehabilitating the tapped-out Ranger uranium mine in northern Australia.
Rio Tinto said ERA Chairman Peter Mansell should step down as the small mining company had failed to put forward an acceptable funding solution to meet its obligations to rehabilitate the Ranger site. Rio Tinto owns around 86% of ERA's stock.
Russia's Gazprom Suspends Gas Flow to Italy
Russian gas giant Gazprom PJSC said it suspended its natural-gas deliveries to Italy over the weekend after it didn't receive authorization for the pipeline flows via Austria.
It wasn't immediately clear whether the interruption was a temporary bureaucratic glitch, or whether Italy has now joined the growing list of European Union countries that have been cut off from Russian gas.
ConEd Agrees to Sell Clean Energy Business for $6.8 Billion to RWE
Consolidated Edison Inc. has agreed to sell its renewable energy business to German energy company RWE AG for $6.8 billion, the companies said Saturday.
The deal nearly doubles RWE's renewable energy portfolio in the U.S. and will make it the second-largest solar operator in the country, the company said in a statement. ConEd's portfolio includes more than 10 gigawatts of renewable projects in operation or under development.
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Expected Major Events for Monday
00:01/IRL: Sep Ireland Manufacturing PMI
06:30/SWI: Sep CPI
07:00/TUR: Sep Turkey Manufacturing PMI
07:00/NED: Sep Netherlands Manufacturing PMI
07:00/POL: Sep Poland Manufacturing PMI
07:00/TUR: Sep PPI
07:00/TUR: Sep CPI
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