European Futures Dip As Traders Await Central Bank Decisions This Week

European equity futures edged lower on Tuesday, following mixed performance across Asian markets, as traders brace for a series of central bank interest rate decisions this week. Contracts for the Euro Stoxx 50 declined, while an Asian stock index traded in a narrow range. In contrast, the equity benchmark in mainland China saw gains. Reuters reported that Beijing plans to set an annual growth target of around 5% for next year and increase its budget deficit to 4% of GDP.

Market sentiment remains focused on key central bank policy moves, including decisions from the US Federal Reserve and the Bank of Japan. In the US, a quarter-point rate cut from the Federal Reserve is widely anticipated on Wednesday, which is expected to provide additional support to the stock market. Meanwhile, Japan’s central bank is expected to maintain its current monetary stance. The Japanese yen, which had weakened past the 154 level against the dollar, managed to snap a six-day losing streak.

“This week will likely be the final active week for the year,” said Wong Kok Hoong, head of institutional equities sales trading at Maybank Securities. “With a Fed rate cut already priced in and the Bank of Japan expected to keep its policy unchanged, US and Japanese stocks should remain well-supported ahead of these key decisions.”

In foreign-exchange markets, an index tracking Asian currencies hit its lowest level in over two years amid growing pessimism over China’s economic outlook and speculation that a second Trump administration could drive further dollar strength.

The rapid decline of the yen over the past week, nearing 155 against the dollar, has raised concerns that additional weakness could prompt verbal intervention from Japanese authorities and intensify pressure on the Bank of Japan to adjust interest rates. Traders are currently pricing in a less than 20% chance of a rate hike in Japan by December, according to swaps market data.

Meanwhile, Bloomberg’s dollar index remained mostly unchanged, and the yield on 10-year US Treasury bonds held steady at 4.40%.

In Hong Kong, Alibaba Group Holdings Ltd. led the decline in the Hang Seng Index after the company announced it would sell its Intime department stores business for approximately $1 billion, which includes a loss of 9.3 billion yuan ($1.3 billion) on its initial investment.

Shares of Japan’s SoftBank Group rose 4.4% after President-elect Donald Trump, alongside CEO Masayoshi Son, announced a plan for the company to invest $100 billion in the US over the next four years.

South Korean electric vehicle battery stocks faced selling pressure, largely due to concerns over US policy, with foreign investors leading the selloff. Samsung Electronics saw a 2.5% drop after Goldman Sachs reduced its price target and lowered earnings estimates by 11%.

The main focus for investors in the coming days will be Wednesday’s Federal Reserve decision, followed by policy announcements from Japan, the UK, and other European nations.

In US futures markets, contracts for the S&P 500 slipped 0.2% following a record high for the Nasdaq 100.

Meanwhile, Bitcoin hit a new all-time high, fueled by Trump’s support for digital assets and expectations that MicroStrategy Inc., a major Bitcoin holder, will be added to a key US stock index.

Oil prices stabilized after a decline, as weak economic data from China heightened concerns about reduced global demand. Gold prices, however, fell slightly following a modest gain in the previous session.