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Europe, US stocks flat ahead of central bank rate decisions

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Other notable events this week include earnings from tech and energy giants, including Apple and Shell, apart from US jobs data

European and US stocks were mostly flat Monday at the start of a week packed with major earnings and data apart from central bank decisions on interest rates.

Oil prices, meanwhile, dropped after hitting three-month highs on concerns over a possible wider conflict in the Middle East after a drone attack in Jordan.

Strikingly, oil prices, which jumped initially on the report, have rolled over, said market analyst Patrick O’Hare at Briefing.com.

The price action there – and in the equity futures market in general – indicates traders are not convinced the drone strike, and impending response, will lead to a more involved military action and major disruption of oil supplies out of the Middle East, he said.

AJ Bell investment director Russ Mould said crude prices having hit their highest since November felt “ominous given it adds inflationary pressure at a time when borrowers and the markets are hoping to see interest rates cut.”

The week’s key market event is expected to be Wednesday’s interest rate policy decision by the Fed.

While the Federal Reserve is expected to keep rates unchanged, traders hope to hear some guidance from officials on their plans, with a cut in March seen as a toss-up.

David Morrison, senior market analyst at Trade Nation, said there were hopes the Fed statement and chairman Jerome Powell’s subsequent press conference “may contain clues to the timing of the first rate cut for nearly four years”.

The BoE will announce its latest interest rate call on Thursday.

Other notable events this week include earnings from tech and energy giants, including Apple and Shell, apart from US jobs data.

Today marks a lull before the calendar heats up with earnings and central bank decisions, said Chris Beauchamp, chief market analyst at online trading platform IG.

As a result, we have seen quiet trading on both sides of the Atlantic, he said.

Elsewhere, the Shanghai stock market ended lower following news that a Hong Kong court had issued a winding-up order against Chinese developer Evergrande, stoking fresh concerns about the property sector and economy.

Evergrande’s Hong Kong-listed shares slumped over 20% on the news before they were suspended.

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