Global stocks steady before busy week, China skips rate cut
By Harry Robertson and Wayne Cole
LONDON/SYDNEY (Reuters) -Global stocks held steady on Monday, with U.S. markets closed for a holiday, while Chinese equities fell slightly after the country's central bank wrong-footed investors by skipping on a rate cut.
MSCI's world stock index was unchanged in morning trading in Europe. It has fallen around 0.35% so far this year after rallying 20% in 2023.
China's CSI 300 index fell to its lowest since 2019 but recovered to stand 0.1% lower as investors digested the central bank's decision to leave its medium-term policy rate unchanged on Monday, defying expectations for a cut.
Despite Monday's sleepy start, investors are in for a busy week with data on Chinese fourth-quarter growth, UK inflation, and U.S. retail sales all due on Wednesday.
They will also be listening closely to central bank officials, especially the Federal Reserve's Christopher Waller, whose dovish turn in late November helped send markets soaring and who speaks on Tuesday.
Europe's STOXX 600 index was down 0.3% on Monday after ending the previous week virtually unchanged. Britain's FTSE 100 and Germany's DAX were also 0.3% lower.
Traders expect around 165 basis points of rate cuts from the Fed this year, and see an 80% chance of them starting in March, according to money market pricing.
«The first half of January has shown a dislocation between rate expectations and data in the U.S.,» said Francesco Pesole, currency strategist at ING.
«The two most important data points for the Federal Reserve, labour and CPI inflation figures, both came in hotter than expected.» Pesole said «strong words from the Fed, perhaps (from) Powell himself,» might be needed to rein in some of the heavy rate-cut bets.
Futures for the S&P
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