Services PMI for eurozone, Italy, Germany, France, UK; EU PPI, ECB consumer expectations survey results; France industrial production index; Italy's economic outlook; UK official reserves; OECD CPI; trading updates from Ashtead Group, Ferguson, Ryanair Holdings, Norwegian Air Shuttle
Shares are set to open mixed in Europe on Tuesday. In Asia, stock benchmarks were mostly lower; Treasury yields were slightly lower; the dollar consolidated; while oil was mixed and gold gained.
European stocks may start out on a mixed note on Tuesday as investors take a breather ahead of the release of both U.S. and European economic data.
Many investors see this week's monthly U.S. jobs data, due Friday, and inflation reports next week as the next tests for the market.
It's a busy week for economic data, but it's the U.S. jobs report on Friday "which will likely end the week with either a bang or a whimper as the expectations for just steady growth in the U.S. for the month ahead seem at ends with the pricing of both bonds and stocks," BNY Mellon said.
"Both markets can't rally together for long without something breaking," it said.
The dollar is little changed as traders reassess bets for the Fed's rate cuts next year.
Market participants seem to be reconsidering whether the aggressive Fed rate cuts priced in for 2024 could be possible, Saxo Markets' APAC Strategy Team said.
The odds of a first-quarter rate reduction have declined to 67% from 75% previously, the team noted.
Treasury yields were a bit lower, with markets betting on an end to interest rate increases by the Fed and cuts approaching fast.
Data due this week is expected to confirm that U.S. labor markets are easing, ahead of next week's FOMC meeting, which is widely expected to keep rates unchanged.
"As markets are already pricing a soft landing close to perfection and term premia remain too low, the risk reward for steepeners is attractive, " Deutsche Bank said.
The Fed is likely to generate recession to bring inflation down to target, it said, and forecasts that "the market will price a deeper rate cut cycle combined with higher term premia [which] should result in a significant steepening of the U.S. curve."
Oil futures were mixed after settling at the lowest levels in more than two weeks on Monday.
Futures may be seeing some support from a media report quoting Saudi Arabia's Energy Minister Prince Abdulaziz bin Salman that OPEC+ oil production cuts can "absolutely " continue past the first quarter if needed.
Saudi Arabia has reportedly ramped up its charm offensive as it seeks to support oil prices following last week's agreement to reduce output further, ANZ Research said.
Gold rose on a likely technical rebound after gold futures fell more than 2% on Monday.
Citi Research remains bullish on gold and silver by mid-2024, expecting strong demand for both precious metals as a hedge against downside risks in developed-market equities and property.
This view also partly reflects Citi's call for a U.S. recession by mid-2024, it said, adding that gold should also be supported by robust central-bank buying activity.
Copper prices were flat as traders weighed the prospects of another Fed rate hike.
Prices of the metal were being weighed down amid fading hopes about rate cuts that fueled a strong rally last week, ANZ said.
That optimism now looks overdone after Fed Chair Jerome Powell said the central bank may raise rates again if required, it said.
A stronger U.S. dollar could also weaken investor appetite for riskier assets like copper, it added.
The metal typically trades inversely to the dollar as it is denominated in USD.
Iron ore prices were lower amid higher inventories ahead of the winter season when industry demand typically slows down.
Total iron-ore stockpiles across ports in China rose 2% on week to 110.7 million tons last week, according to Steelhome data, ANZ said.
Traders continue to eye developments in China's property sector for guidance on steel demand, it said.
Seven Chinese banks have convened with developers to review their funding needs as Beijing ramps up its support for social housing, it added.
TODAY'S TOP HEADLINES
China's November Caixin Services PMI Rose to Three-Month High
A private gauge of China's services activities rose to a three-month high in November, contrasting with an official index that tumbled into contraction.
The Caixin services purchasing managers index climbed to 51.5 in November from 50.4 in October, Caixin Media Co. and S&P Global said Tuesday. A reading above the 50 mark suggests activity expansion, while one below that level indicates contraction.
Tight monetary policy, economic headwinds fuel negative outlook on banks from Moody's
Moody's Investor Service on Monday issued a negative outlook for global banks in 2024 as financial firms face tighter central bank monetary policies, lower economic growth and greater asset risk.
Higher cost of capital will cause profitability gains to slow down while impacting loan growth. Banks are expected to build up reserves to shore up their balance sheets in an economic slowdown, Moody's said.
AT&T Drops Nokia for Ericsson in $14 Billion Deal
AT&T struck a deal with Ericsson to buy up to $14 billion of its hardware and services after the Swedish equipment supplier pledged to open up its software to competing systems.
The five-year agreement would move virtually all of AT&T's new purchases of certain cell-tower equipment to Ericsson, replacing existing machinery from Finnish rival Nokia in many markets. The Dallas-based telecom giant said it plans to start the swap next year and aims to have 70% of its wireless network traffic passing through open platforms by late 2026.
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Expected Major Events for Tuesday
00:01/UK: Nov BRC-KPMG Retail Sales Monitor
01:01/IRL: Nov Ireland Services PMI
07:00/ROM: Oct PPI
07:00/SWE: 3Q Balance of Payments
07:45/FRA: Oct Industrial production index
08:00/SVK: 3Q GDP
08:00/SPN: Oct Industrial Production
08:00/SPN: 3Q Housing Price Index
08:15/SPN: Nov Spain Services PMI
08:45/ITA: Nov Italy Services PMI
08:50/FRA: Nov France Services PMI
08:55/GER: Nov Germany Services PMI
09:00/EU: Nov Eurozone Services PMI
09:00/UK: Nov UK monthly car registrations figures
09:30/UK: Nov S&P Global / CIPS UK Services PMI
09:30/UK: Nov UK Official Reserves
10:00/EU: Oct PPI
10:00/CYP: Nov Registered Unemployed
11:00/FRA: Oct OECD CPI
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This article is a text version of a Wall Street Journal newsletter published earlier today.
(END) Dow Jones Newswires