Stocks and futures are down, with rate forecasts in the spotlight

European stock futures and Asian stocks were lower at the start of a big week for the markets as interest rate decisions were to be made by the Federal Reserve, the European Central Bank, and other banks.

The Asian stock index fell, and the spread of the virus in China caused concern, as the Hang Seng index fell by about 2%. The decline in European and US futures came after a decline on Wall Street at the end of Friday when the S&P 500 closed low.

The dollar edged higher against all of its G-10 peers, and the 10-year Treasury yield tumbled after a swing on Friday that saw it fall just below 3.6%. Australian and New Zealand government bond yields rose.

Recession worries resurfaced ahead of the Fed’s decision to cut rates to a 50 basis point hike. But officials emphasized that borrowing costs would need to remain capped for some time.

The ECB will make its decision on Thursday but is also expected to raise rates by 50 basis points. Bank of England and the monetary authorities of Mexico, Norway, the Philippines, Switzerland, and Taiwan will also make decisions this week.

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Global equities are set to suffer their biggest losses since 2008 this year, but the world’s biggest investors say equities will see a modest double-digit gain in 2023.

The world’s leading fund managers are also largely bullish on Chinese equities for 2023.

However, this week everyone will be watching the data on consumer inflation in the US on Tuesday ahead of the Fed meeting. Prices are expected to continue to decline.

Meanwhile, US natural gas futures continued to rise in the fourth session due to increased demand for heating amid the storm. Oil rallied, rebounding from its biggest weekly drop since April, while gold tumbled.