European Shares Seen Lower With Focus On US Inflation Data

(RTTNews) - European stocks are likely to open on a sluggish note Monday as investors seek cues from the quarterly earnings season and key U.S. data due this week.

U.S. inflation data will be in the spotlight this week, with the Labour Department scheduled to release separate reports on consumer and producer price inflation on Thursday and Friday, respectively.

Asian markets were seeing broad-based losses after Wall Street logged its worst week since Halloween on Friday.

Hong Kong's Hang Seng index was down over 2 percent after China announced sanctions on five Western defense firms in response to U.S. arms sales to Taiwan.

The announcement comes just days before Taiwan's crucial presidential and parliamentary elections on January 13.

Regional losses elsewhere remained capped somewhat as U.S. Congressional leaders agreed on the overall spending level for the current fiscal year in an attempt to avoid a partial government shutdown later this month.

Investors also fretted about an escalation of the Israel-Hamas war into a broader regional conflict and awaited inflation data from China and Japan for directional cues.

U.S. Secretary of State Antony Blinken would hold talks in the United Arab Emirates and Saudi Arabia today before proceeding to Israel.

He has warned that the conflict in Gaza could "easily" spill over into a full-blown regional conflict.

Gold ticked lower after a broad bound in the dollar while oil prices fell more than 1 percent on sharp price cuts by top exporter Saudi Arabia and a rise in OPEC output.

Saudi Arabia on Sunday cut oil prices to Asian markets to their lowest level in 27 months.

U.S. stocks fluctuated before finishing slightly higher on Friday but ended lower for the first time in ten weeks amid much uncertainty about the timing and pace of interest rate cuts.

Data showed the U.S. economy added many more jobs than anticipated in December and unemployment rate held steady at 3.7 percent in another sign of continued labor market strength.

On the flip side, there were notable downward revisions to job growth in October and November and the services sector growth slowed more than expected in December.

The tech-heavy Nasdaq Composite ended marginally higher to snap a five-session losing streak. The Dow edged up 0.1 percent while the S&P 500 added 0.2 percent after four consecutive days of losses.

European stocks ended Friday's session with modest losses and posted their first weekly loss in eight weeks as data showed German retail sales fell more than expected in November and Eurozone inflation rebounded in December, fueling rate-cut debates.

The pan-European STOXX 600 dropped 0.3 percent. The German DAX slipped 0.1 percent, while France's CAC 40 and the U.K.'s FTSE 100 both shed around 0.4 percent.