by Diana Mandia

(Reuters) – Wall Street is expected to fall slightly on Monday and European stock markets are rising at mid-session, with the exception of Frankfurt, driven by the warning signs of new stimulus measures in China and before the Bank’s decision European Central (ECB) on rates on Thursday.

Futures on New York indices signal an opening on Wall Street up 0.04% for the Dow Jones, and down 0.11% for the Standard & Poor’s-500. The Nasdaq should open down 0.25%. In Paris, the CAC 40 gained 0.48% to 7,462.20 points around 11:57 GMT. In Frankfurt, the Dax fell by 0.15% and in London, the FTSE 100 gained 0.43%.

The EuroStoxx 50 index is up 0.06%, the FTSEurofirst 300 is up 0.10% and the Stoxx 600 is up 0.07%.

European stock markets started the week on a positive note, thanks in particular to hopes of new stimulus measures in China after the Xinhua news agency reported on Monday that the Politburo was pleading for a “sufficiently flexible” monetary policy, which which marks a change in tone suggesting that Beijing will do more to support its economy.

Optimism about the future measures of the world’s second largest economy, mired in a real estate crisis, is boosting mining and luxury stocks, heavily exposed to the Asian giant.

“This is a wording rather than an action, but this wording appears to be very positive from an economic point of view,” said Lewis Grant, portfolio manager at Federated Hermes.

Investors are also awaiting announcements from the ECB, which is expected to announce a 25 basis point cut on Thursday, although some traders believe Frankfurt could cut 50 basis points due to weak eurozone activity, the threat of tariffs by the future Trump administration and China’s slowdown.

In the euro zone, investor morale fell in December to its lowest level in more than a year, according to a survey published Monday, with the German political situation weighing on their expectations.

“France and Germany are going through a phase of political uncertainty, and budgetary policies are tightened. In addition, there are signs of a cooling of the labor market, which should limit the bargaining power of employees,” note analysts at ODDO in a note published Monday, adding that the center of gravity of the Governing Council “has shifted a bit to the ‘dovish’ side of late.”

In the United States, operators will monitor CPI inflation on Wednesday, after a monthly employment report published on Friday which suggests good resistance in American activity.

VALUES IN EUROPE

Mining stocks, very sensitive to expectations on demand in China, rose by 3.5% with the prospects of new stimulus measures from Beijing. Another sector heavily exposed to China, luxury, also benefits from investor optimism, growing by 1.5%. LVMH, Kering and Richemont advance by 2.6%, 3.4% and 3%.

The energy sector gained 1.5% with the rise in oil prices following the fall of Syrian President Bashar al Assad, raising fears of a new wave of instability in a region already in the grip of war.

Rexel gains 1.5% after Morgan Stanley raised its recommendation on the stock to “overweight”, while Société Générale gains 2.5%, supported by the raising of Exane BNP Paribas to “outperform”.

The German company specializing in meal kits Hellofresh, on the other hand, fell by 7.8%, traders citing a report on an investigation into allegations according to which migrant minors had worked in a factory of the group in Illinois.

VALUES TO FOLLOW AT WALL STREET

Shares of US-listed Chinese companies such as Alibaba, PDD Holdings and Baidu are expected to rise after China’s Politburo hinted it will adopt a looser monetary policy next year to boost growth.

RATE

Yields on benchmark euro zone bonds are falling ahead of the ECB meeting later this week.

The ten-year German Bund yield fell 1.2 basis points to 2.1040%. The two-year lost 1.7 basis points to 1.9980%.

In the United States, yields edge up ahead of the release of new inflation data later in the week. The yield on ten-year Treasuries rose 1.1 basis points to 4.1644% and that of its two-year counterpart gained 0.8 basis points to 4.1058%.

FOREIGN EXCHANGES On the foreign exchange market, the dollar lost 0.16% against a basket of reference currencies before inflation data, while the euro took the opportunity to advance 0.09% to 1.0577 dollars.

OIL

Oil prices rose Monday on fears that the fall of Syrian President Bashar al-Assad could lead to further escalation in the Middle East.

Brent gained 1.12% to $71.92 per barrel and American light crude (West Texas Intermediate, WTI) gained 1.31% to $68.08.

NO MORE MAJOR ECONOMIC INDICATOR ON THE AGENDA FOR DECEMBER 9

(Some data may have a slight lag)

(Written by Diana Mandiá, edited by Augustin Turpin)

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