The FINANCIAL — Europe's financial markets are opening with a cautious tone Monday, with key meetings this week of the Federal Reserve and the European Central Bank, not to mention Friday's U.S. employment report, likely to keep market activity limited early in the week.
"With the majority of the major U.S. companies having already reported first quarter earnings, there's going to be a lot more emphasis on economic data this week," said Craig Erlam, market analyst at Alpari (UK), in a note to clients, according to Borsa Italiana Spa.
Ahead of the stock markets' opening, Alpari is calling the FTSE 100 up just one point at 6427, the CAC-40 up five at 3815 and the DAX up 16 at 7831. In the foreign exchanges, the dollar is weaker than in late New York trading Friday. German Bund futures have opened a touch lower, crude oil futures are softer and the gold price is firmer.
The Federal Open Market Committee will meet on Tuesday and Wednesday, while investors will also be looking to the European Central Bank's policy meeting on May 2, when there is an expectation of an interest rate cut. Ahead of this, Italy will attempt Monday to sell five- and 10-year debt, in what will be seen as an early test of investor sentiment following the formation of the coalition government led by new Prime Minister Enrico Letta.
"I expect to see yields fall at the auction this morning, with many seeing the formation of the coalition as a step forward for Italy, following two months of political paralysis," said Mr. Erlam.
Aside from this, economic releases Monday include German inflation data for April and U.S. personal income and spending numbers for March.
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