European stocks may open a tad higher on Monday despite persistent inflation and geopolitical concerns.
Asian markets were broadly lower, though Chinese shares climbed as traders returned to their desks after a week-long holiday for the Lunar New Year.
Covid-19 worries returned to haunt investors, with Japan scrambling to curb the spread of the now dominant Omicron variant of the coronavirus.
Geopolitical tensions were also in focus, with the White House warning Russia could invade Ukraine any day.
On the other hand, French President Emmanuel Macron, who flies to Moscow today in a risky diplomatic move and will travel to Kyiv on Tuesday, is optimistic he can secure peace.
The dollar edged up as expectations of higher interest rates lifted bond yields.
After a strong U.S. jobs report, investors are now bracing for five rate hikes in 2022. In Europe, European Central Bank (ECB) Governing Council Member Klaas Knot said he expects a hike in the fourth quarter of 2022.
Gold hit a more than one-week high, as surging oil prices along with an increase in global commodity prices added to existing inflationary pressures.
U.S. inflation data for January is due on Thursday and a strong reading could help consolidate expectations of a 50bp hike by the Federal Reserve.
A private survey showed earlier today that activity in China’s services sector expanded at the slowest pace in five months in January.
U.S. stocks rose broadly on Friday, as investors reacted to a slew of upbeat earnings updates and a much stronger-than-expected January jobs report that lifted yields and added to the risk of an aggressive tightening by the Federal Reserve.
The tech-heavy Nasdaq Composite rallied 1.6 percent on the back of strong earnings news from Amazon and the S&P 500 rose half a percent, while the Dow slipped marginally.
U.S. employment jumped by 467,000 jobs in January compared to economist estimates for an increase of 150,000 jobs while the jobless rate inched up to 4.0 percent from 3.9 percent.
The increase in employment in December was upwardly revised to 510,000 jobs compared to the previously reported 199,000 jobs.
European stocks fell on Friday amid concerns about looming interest rate hikes.
The pan European Stoxx 600 dropped 1.4 percent. The German DAX gave up 1.8 percent, France’s CAC 40 index shed 0.8 percent and the U.K.’s FTSE 100 slipped 0.2 percent.
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