European Shares Poised For Steady Start On Fed Pause Hopes

(RTTNews) - European stocks are likely to open a tad higher on Monday amid speculation the Federal Reserve may consider a pause in the historically aggressive tightening.

San Francisco Federal Reserve Bank President Mary Daly said Friday that the central bank should avoid putting the economy into an "unforced downturn" by raising interest rates too sharply. She added that the Fed is nearing a point where it should slow rate hikes.

Asian markets traded mixed, with Chinese and Hong Kong stocks slipping into the red, as China's Communist Party ended its 20th National Congress over the weekend with no signs of a significant change in the zero-COVID policy that has crimped business and trade.

Also, Xi Jinping, who secured a third term as Chinese President, indicated no changes in policies straining relations with Washington and Asian neighbors.

The second-largest economy grew at a 3.9 percent annual pace, up from the previous quarter's 0.4 percent but well below the official target of around 5.5 percent, official data showed.

The monthly indicators for September painted a mixed picture. Retail sales growth slowed from August and the urban jobless rate nudged up, while industrial output growth exceeded forecasts.

The data, originally scheduled for release on Oct. 18, was delayed amid the key Communist Party Congress last week.

Gold traded flat after climbing 1.8 percent in the previous session. The dollar index edged up slightly while oil dipped amid lingering concerns over a global economic slowdown.

The British pound extended gains as former Prime Minister Boris Johnson pulled out of the leadership contest and former Treasury chief Rishi Sunak emerged as the clear frontrunner to be the country's next prime minister.

Meanwhile, ratings agency Moody's lowered the U.K.'s economic outlook from "stable" to "negative" citing political instability and high inflation.

Flash Purchasing Managers' survey results from Eurozone and the U.K. are due later in the session, headlining a light day for the European economic news.

Across the Atlantic, the inflation reading contained in the personal income and spending report along with other reports on consumer confidence, new home sales and durable goods orders may be in the spotlight this week.

A slew of big-name U.S. companies will report their quarterly results this week, including Coca-Cola, General Electric, General Motors, UPS, Microsoft, Boeing, Ford, McDonald's, Apple, Intel and Exxon Mobil.

U.S. stocks rallied on Friday to notch their best week since June, as treasury yields showed a notable downturn on reports that Fed officials will likely debate on a smaller interest rate hike in December, following a widely expected 75 basis point increase in early November.

The Dow climbed 2.5 percent to reach its best closing level in over a month, the tech-heavy Nasdaq Composite surged 2.3 percent and the S&P 500 added 2.4 percent.

European stocks cut early losses to end on a mixed note Friday as the U.K. political turmoil continued.

The pan European Stoxx 600 gave up 0.6 percent. The German DAX slipped 0.3 percent and France's CAC 40 index shed 0.9 percent while the U.K.'s FTSE 100 rose 0.4 percent.