A look at the day ahead in European and global markets from

Wayne Cole.

It's been a quietly positive start to the week for markets

with China's central bank lowering its 14-day repo rate by 10

bps, a couple of days after disappointing markets by not cutting

longer-term rates.

Analysts cautioned the move was only catching up to an

already delivered cut to 7-day repo rates but stocks

were happy for anything and added 0.6%.

Japan is on holiday but Nikkei futures are trading

740 points above the cash close. Wall Street and European

futures were all up between 0.2% and 0.6%.

The dollar and euro extended gains on the yen in the wake of

Friday's dovish comments by the head of the Bank of Japan.

The S&P is up 1% so far in September, historically the

weakest month for stocks, and has gained 19% year-to-date to

reach all-time highs.

More than 20 billion shares changed hands on U.S. exchanges

on Friday, the busiest session since January 2021. Analysts at

Bank of America noted the S&P rises an average of 21% when there

is no recession in the 12 months after the start of Fed cuts.

Markets were still basking in the afterglow of the Federal

Reserve's half-point rate cut, with futures implying a 50%

probability it will deliver another outsized move in November.

At least nine Fed policy makers are speaking this week,

including prepared remarks from Chair Jerome Powell, two

governors and New York Fed President John Williams.

Much will depend on what the Fed's preferred inflation

gauge, core personal consumption expenditures (PCE), shows on

Friday. Analysts expect a 0.2% month-on-month rise taking the

annual pace to 2.7%, while the headline index is seen slowing to

just 2.3%.

The coming week also includes surveys on global

manufacturing, U.S. consumer confidence and durable goods.

The Swiss National Bank meets on Thursday and markets are

fully priced for a quarter-point cut to 1.0%, with a 41% chance

it will ease by 50 basis points.

Sweden's central bank meets on Wednesday and is also

expected to ease by 25 basis points, again with some chance it

might go larger.

One bank not easing is the Reserve Bank of Australia (RBA),

which meets on Tuesday and is considered almost certain to hold

at 4.35% as inflation proves stubborn.

Investors were also keeping a wary eye on negotiations to

avoid a U.S. government shutdown with just days before the

current $1.2 trillion in funding runs out on Sept. 30.

Republican U.S. House of Representatives Speaker Mike Johnson on

Sunday proposed a three-month stopgap funding bill but now it

has to go to vote.

Key developments that could influence markets on Monday:

- Flash September PMIs for Europe and U.S., Chicago Fed

activity index

- Appearances by European Central Bank board member Piero

Cipollone and ECB board member Frank Elderson

- Speeches by Fed Bank of Atlanta President Raphael Bostic,

Fed Bank of Chicago President Austan Goolsbee and Fed Bank of

Minneapolis President Neel Kashkari