European shares were set to start weaker on Monday, taking their cue from a weaker Wall Street with gains in crude oil also dampening sentiment, though exporters such as cars are likely to welcome a stronger dollar.
The new U.S. earnings season kicks off this week in the traditional fashion with the scorecard from aluminium giant and Dow industrial Alcoa on Monday, with other top names also reporting, such as global chip leader Intel on Tuesday.
With the European earnings season not starting until later on in the month, investors will be keen to get any guidance for 2005 from leading U.S. companies, though several top names in the European retail sector will give business updates during this week.
MARKET OUTLOOK
* Financial bookmakers in London expect the FTSE 100, CAC 40, and DAX indexes to open down between 9 and 17 points.
* The FTSEurofirst 300 index of leading European shares notched up a 30-month closing high on Friday as slightly weaker-than-expected growth in new U.S. jobs soothed concern that U.S. interest rates have much further to rise, though many economists still expect the Federal Reserve to hike borrowing costs early next month.
* U.S. stocks ended their first week of 2005 lower on Friday.
* U.S. Treasuries short-term yields climbed toward two-year highs on Friday as investors bet the latest U.S. jobs report was solid enough to keep the Federal Reserve raising interest rates when it meets in early February.
Benchmark U.S. 10-year yields were trading at around 4.27 percent.
Comparable 10-year European government bonds yielded 3.6 percent.
* U.S. crude oil futures were trading up 0.22 cents at $45.65 a barrel, bolstered by tougher OPEC talk on defending prices and the continued risk of a U.S. cold spell to thin winter fuel supplies.
* The dollar steadied near a six-week high against the euro in Asian trade after surging on Friday following U.S. Treasury secretary John Snow's remarks that indicated the United States sought a strong greenback.
* In Tokyo, the [Nikkei average]1 was not trading due to a public holiday.
*Gold firmed in Asia, but dealings were thin due to the Japanese holiday.