SYDNEY/LONDON, Nov 20 (Reuters) - Stocks were broadly steady on Monday in thin trading ahead of the U.S. Thanksgiving holiday later in the week and in the absence of any major data releases that could give direction. to the markets, while the dollar fell against the main currencies. .
Europe's STOXX benchmark <.STOXX> remained flat, while US futures rose.
The dollar index bottomed at 103.53, its weakest level since early September, as investors appeared to solidify bets that U.S. interest rates have peaked and the Federal Reserve could begin cutting rates. next year.
Asian stock markets were livelier earlier in the day as Japanese stocks hit highs not seen since 1990, helped by strong earnings and foreign demand that fueled a three-week winning streak.
Nikkei of Japan (.N225) ran into profit-taking at its peak, but is still up 8.2% month-to-date on the Topix (.TOPX) not too far.
Meanwhile there was media reports that Israel, the United States and Hamas had reached a provisional agreement to release dozens of hostages in Gaza in exchange for a five-day pause in fighting, but there is still no confirmation.
Black Friday sales will test the pulse of the consumer-driven U.S. economy this week, while the upcoming Thanksgiving holiday created a shortage of markets.
The flow of US economic data slows this week, but the minutes of the Federal Reserve's latest meeting will offer some color on the thinking of policymakers, who kept rates steady for the second time.
"The dovish minutes could trigger some downside risk for the dollar, otherwise the week's economic calendar looks relatively calm for the dollar," said Ricardo Evangelista, senior analyst at ActivTradessaying.
Signs of progress in the battle against inflation in the United States have fueled a rally in stocks this year as investors hope for an end to the cycle of rate hikes that have been authorities' main tool to combat rising drug prices. the goods.
The S&P is now up almost 18% so far this year and is less than 2% from its July high.
However, Goldman Sachs analysts note that the "Magnificent 7" mega-cap stocks have returned 73% so far this year, compared to just 6% for the remaining 493 companies.
"We expect mega-cap technology stocks to continue to outperform given their expected superior sales growth, margins, reinvestment ratios and balance sheet strength," they wrote in a note. "But the risk/reward profile is not particularly compelling given the high expectations."
Nvidia technology specialist (NVDA.O) reports quarterly results on Tuesday, and all eyes will be on the state of demand for its AI-related products.
GREAT PRICE IN
Markets have all but ruled out the risk of a further US rate hike in December or next year, and are implying a 30% chance of easing starting in March. Futures also imply about 100 basis points of cuts by 2024, down from 77 basis points before the benign October inflation report that rattled markets.
Benchmark 10-year Treasury yields rose 5 basis points on the day to 4.484%, having fallen 19 basis points last week and away from October's high of 5.02%.
There was also relief in Europe for some battered sovereign names, as the risk premiums investors ask to hold Italian and Portuguese debt fell after ratings agency Moody's upgraded its view on the two countries.
It upgraded the outlook for Italy to stable from negative and raised Portugal's long-term issuer rating two notches to A3 from Baa2, narrowing spreads on both bonds relative to the region's benchmark 10-year German bonds.
Closely watched surveys on the European manufacturing sector will be released this week and any sign of weakness will encourage more bets and early rate cuts by the European Central Bank.
"These surveys will be very important around the euro area services sector, given the sharp deterioration seen recently," NAB analysts said. "If another weak print occurs, the price of ECB cuts is expected to extend beyond the current 100 basis points of cuts being priced in for 2024."
Markets are predicting around a 70% chance of easing from April, although many ECBs officials There is still talk of the need to maintain a strict policy for longer.
Sweden's central bank meets this week and could raise rates again, given high inflation and a weak currency.
In commodity markets, oil rebounded from four-month lows on Friday amid speculation that OPEC+ will extend, or increase, its production cuts at a Nov. 26 meeting.
Brent rose 1.7% to $81.95 a barrel, while US crude rose 1.66% to $77.15.
Gold fell 0.4% to $1,971 an ounce, after rising 2.2% last week.
Reporting by Wayne Cole and Lawrence White; Editing by Lincoln Feast, Susan Fenton, and Sharon Singleton
Our standards: The Thomson Reuters Trust Principles.
