FX.co ★ European Shares Likely To Drift Lower Ahead Of Busy Week For Central Banks

European stocks are set to open on a lower note this Monday as investors contemplate the potential impacts of governmental shifts and disruptions in Germany and France on both consumers and businesses.

The European Central Bank (ECB) is anticipated to cut interest rates again this week, driven by concerns surrounding fiscal policy developments in these nations. Similarly, the Bank of Canada and the Swiss National Bank are likely to ease their policies, whereas the Brazilian central bank might increase rates to curb inflation pressures.

In Australia, the central bank is expected to maintain its key interest rate, thanks to a resilient labor market that keeps inflation high.

Asian markets experienced declines, with Seoul stocks at the forefront of regional losses as investors prepared for a period of heightened market volatility. This comes amid a lingering risk of an extended deadlock following the failure of Saturday's impeachment motion against Yoon. The main opposition party has indicated plans to pursue another vote swiftly.

Meanwhile, in China, disappointing inflation data has highlighted ongoing demand weaknesses. Japan's GDP for the third quarter was revised upward, challenging expectations of a rate hike by the Bank of Japan in December. China's consumer price growth slowed in November, with factory-gate prices continuing their decline, increasing pressure on officials to bolster consumer confidence during a crucial policy meeting this month.

On the geopolitical front, anti-government rebels declared full control over Homs and the capital, Damascus, on Sunday after Syrian President Bashar al-Assad fled the country, marking the end of a five-decade regime. Russian media reported that the ousted President was granted asylum in Moscow on humanitarian grounds.

Oil prices climbed higher as tensions in Syria overshadowed the news of Saudi Arabia cutting prices more sharply than anticipated for Asian buyers. Gold saw a modest increase after China's central bank expanded its gold reserves in November, concluding a six-month hiatus in their purchasing activities.

In the U.S., stocks showed mixed results on Friday following the release of better-than-expected jobs and consumer sentiment data. Non-farm payroll employment rose sharply by 227,000 in November, following an upwardly revised increase of 36,000 jobs in October. The unemployment rate edged up slightly to 4.2 percent from 4.1 percent in October, boosting investor confidence that the Federal Reserve will reduce interest rates by another 25 basis points later this month.

The tech-heavy Nasdaq Composite advanced by 0.8 percent, and the S&P 500 increased by 0.3 percent to reach new record closing highs, while the Dow Jones Industrial Average dipped by 0.3 percent.

European stocks rallied on Friday, driven by optimism over the French government's potential to pass a new budget within weeks. The pan-European STOXX 600 rose by 0.2 percent, the German DAX edged up by 0.1 percent, and France's CAC 40 surged by 1.3 percent, whereas the U.K.'s FTSE 100 fell by half a percent.