European stock looking weaker, prior to the release of data on Eurozone retail sales, investors are expected to be wary as European stock markets open on Monday. This is because China has set a modest growth goal for its economy this year.
European stocks expected to decline in the session
After Chinese government officials announced a 5 percent economic growth goal for 2023, over the weekend. As they opened the annual session of the National People’s Congress. European stocks are expected to open the new week cautiously.
A major export market for European businesses, China’s economy expanded by 3 percent last year. Because of the severe mobility limitations necessary to fight COVID-19, This was one of the slowest growth rates in almost fifty years.
Nevertheless, recent figures revealed that after the anti-COVID restrictions were eased, Chinese business activity drastically recovered in Feb, and hopes were for a higher growth goal for 2023.
European stocks looking to January Retail Sales data, and US Fed
Returning to Europe, the Eurozone’s Jan retail sales figures will be the day’s major economic news. This is anticipated to demonstrate a growth of 1.0 percent month over month. Reversing the prior month’s decline of 2.7%.
But even so, this still reflects a 1.8 percent annual decline,.A small increase from the 2.8 percent annual loss in Dec, Because, higher costs have an effect on consumers’ consumption expenditure.
Prior to the release of the February employment report on Friday, which could influence the mood ahead of the U.S. central bank’s policy- meeting, later this month. European stocks may get hit or a surprise.
Corporate Earnings
After the Italian state investor, CDP made an offer for the fixed-line network of the former phone monopoly over the weekend.
If it is done. It is likely that Telecom Italia (BIT: TLIT) will be in the limelight in the corporate sector. This could lead to a bidding war with American investment firm KKR (NYSE: KKR).
After Harris Associates revealed it had divested its stake in the Swiss bank over the past few months. Credit Suisse (SIX: CSGN) has did lose one of its biggest supporters. Adding further pressure to the troubled Swiss lending institution.
Crude oil trading lower
Oil prices fell again on Monday because China announced a lower-than-anticipated economic growth goal for this year. Disappointing traders who were counting on robust growth from the world’s biggest crude importer.
U.S. oil futures were trading 0.7 percent weaker at $79.09 per barrel by 2:00 ET. Whereas, the Brent contract was down 0.8 percentage points at $85.15.
Forex in View
Yen
With the USD weakening, USDJPY trades with modest losses; the downside appears to be restricted.
For the second straight day, the USDJPY pair experienced some selling pressure and moved further away from the YTD peak. Which was near the 137.10 area hit last week.
Even so, the duo came back a few pips from the daily bottom, and traded in the early European session, just above the mid-135.00s. Down about 0.20 percent on the day till now.
Us dollar
The US Dollar starts the new week off in a muted manner despite a slight decline in US Treasury bond yields, and this ends up being a major factor pushing the USDJPY pair lower.
In addition, the impending threat of a recession appears to favor the Japanese Yen (JPY), a safe haven currency, and support the offered tone enveloping the major.
In comparison to projections at the end of January, the current scenario indicates an additional 2 hikes. As a result, more dovish dissatisfaction is allowing the US Dollar to gain strength.
