Investors prepared for a week full of central bank meetings, including those from the U.S. Fed, and expect European stock markets to start the week slightly higher.

Investors prepared for a week full of central bank meetings, including those from the U.S. Fed, and expect European stock markets to start the week slightly higher.

Focus on ECB officials

Investors were encouraged by indications that the ECB is almost done increasing interest rates as European markets concluded last week on a bullish note.

On Thursday, the ECB increased interest rates once again to a record high of 4%, but the press statement that went along with it suggested that this was likely to be the final increase given the weak state of the eurozone's economy.

Luis de Guindos, Frank Elderson, and Fabio Panetta, policymakers at the ECB, are expected to speak today. The amount of divergence from the more hawkish members of the group about the signs of an end to the year-long cycle of rate hikes will be determined by their statements.

Fed leads the way

Several significant central banks are holding meetings this week to establish their policy, including the Bank of England on Thursday and the Bank of Japan on Friday.

The Fed's meeting on Wednesday, when the American central bank is generally anticipated to declare a pause in its string of interest rate rises, will be the main event.

On the other hand, the Fed is likely to maintain its hawkish perspective and likely imply higher-for-longer rates given that U.S. consumer inflation increased by 0.6% on a monthly basis last month, the highest advance since June 2022, which was driven by higher petrol costs.

Demand issues are affecting the chip industry

The electronics industry is set to be in the spotlight once again in Europe following a Reuters story that Taiwan Semiconductor Manufacturing, the largest contract chipmaker in the world, has ordered its suppliers to postpone deliveries due to concerns over sluggish demand.

As a result of this warning and continued worries about rising interest rates and decreasing investment in technological infrastructure, shares of key Asian chip manufacturing companies fell on Monday.

Crude continues to rise before central bank meetings

On the strength of forecasts of a tighter market ahead of a number of central bank policy-setting meetings this week, oil prices continued to rise on Monday.

Following production cuts from Saudi Arabia and Russia, the price of oil has increased by over 30% over the last three months. This might cause the market to have a significant deficit in the fourth quarter.

Traders will be keeping an eye on the central banks' choices and remarks this week about interest rate plans, notably the U.S. Federal Reserve, as well as important economic data from China.

(Sources: investing.com, reuters.com)