European Shares Poised For Soft Start In Thin Trade

European stocks may open on a sluggish note Monday as investors await China’s rate decision, the Bank of England’s monetary policy announcement and Fed Chair Jerome Powell’s testimonies this week for directional cues.

Trading volumes may remain light due to the Juneteenth holiday in the U.S.

The People’s Bank of China is widely expected to cut its benchmark loan prime interest rates on Tuesday after China’s cabinet vowed to roll out more policy support.

U.S. Secretary of State Antony Blinken met today with China’s top diplomat Wang Yi on the second and final day of a visit to Beijing as part of efforts to improve strained relations between the world’s two biggest economies.

Investors are waiting to see whether Blinken would also meet China’s President Xi Jinping.

The Bank of England meets on Thursday and the central bank is expected to raise interest rates by a quarter point to a 15-year high of 4.75 percent, marking its 13th straight rate rise.

Asian markets fell broadly while gold was marginally lower on dollar strength on uncertainty over the path of U.S. monetary policy.

Inflation in key parts of the U.S. service industry “remains elevated and has not shown signs of easing,” the Fed said in its latest monetary policy report to Congress.

Fed Chair Jerome Powell is all set to deliver congressional testimonies on Wednesday and Thursday, with investors looking for clues on the monetary policy ahead.

U.S. housing data as well as speeches by several Fed officials also remain on investors’ radar this week.

Oil prices fell over 1 percent in Asian trading after having risen over two percent last week.

U.S. stocks reversed direction to end lower on Friday after recent strong gains.

Economic data brought some cheer, with a measure of consumer sentiment rising in June to the highest level in four months while consumers’ near-term inflation expectations dropped to more than a two-year low.

The tech-heavy Nasdaq Composite shed 0.7 percent, the S&P 500 slipped 0.4 percent and the Dow eased 0.3 percent.

European stocks closed higher on Friday, with signs of slowing Eurozone inflation and optimism about further stimulus from China helping underpin sentiment.

The pan European STOXX 600 added half a percent. The German DAX edged up 0.4 percent, France’s CAC 40 rallied 1.3 percent and the U.K.’s FTSE 100 inched up 0.2 percent.

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