Last checked at 
STOXX 600 up 0.15%
*
Informa leads media stocks up
*
Fed's Waller warns on inflation
*
U.S. stock futures dip
Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at .
DID MARKETS OVERREACT TO U.S. CPI? MAYBE (1248 GMT)
Data last week showed U.S. consumer prices rose less than expected in October, which came as a relief to financial markets desperate for any signs of inflation slowing.
The S&P 500 and the Nasdaq indexes clocked their best session in over two and a half years on Friday following the CPI print, which Harry Allen, an analyst at Deutsche Bank says is understandable.
But Allen notes several reasons suggesting that investors might have been too enthusiastic, starting with how markets are now pricing in a more dovish fed funds rate of 4.47% by end-2023, below the Fed's recent dot-plot, which showed the median dot at 4.6%.
"Investors are now back in a position where they're pricing a more dovish outcome than the Fed themselves have suggested, even though the Fed have been persistently surprising in a hawkish direction over the last year," he said.
Allen also says that even though inflation is slowing, it is still running above the Fed's target and monthly prints aren't low enough to allow the the central bank room to pivot.
And along with hawkish commentary from multiple Fed policymakers, Allen says "in pricing a pivot it eases financial conditions, which itself makes inflation harder to control and a pivot less rather than more likely."
As ugly as the situation remains for cryptocurrencies, analysts now argue that it has pulled focus back to stocks, especially for technology shares, which have typically been high performers.
"This means investors who might have formerly gone to Voyager or Genesis to invest in crypto assets will now instead go to the NASDAQ," said Stefan Rust, chief executive office of Laguna Labs.
Now that U.S. inflation showed some signs of cooling in October, "bottom fishing" will be the way to go for investors to capture the most upside, according to Rust.
Analysts at Citi note that cryptocurrency markets are too small and too siloed to cause contagion in the broader financial markets, "with an $890 billion market cap in comparison to U.S. equity's $41 trillion."
"FADE OR CHASE": THAT IS THE QUESTION (1117 GMT)
A number of top equity benchmarks from the DAX to the Dow are now up near 20% from October lows. A big bounce which has now investors wondering whether it should be faded or chased.
Here's how Berenberg sees it.
"Against the backdrop of a tough year for equities, these gains have been most welcome. However, the key question for investors is whether this is another bear market rally or whether this is the start of a new equity bull market?," write the German bank's strategists led by Jonathan Stubbs.
"Ahead of likely recessions across Western economies in 2023, with technical tailwinds now headwinds, and with many of our macro and fundamental signals suggesting that it is too early to turn bullish, we think that this is still a bear market rally and that investors should choose 'fade' over 'chase'," Stubbs and team add.
CREDIT WHERE CREDIT'S DUE (0958 GMT)
European investors may be breathing a sigh of relief that energy prices have come off their 2022 highs and earnings season so far is decent. But analysts believe recession is a near-certainty and the credit market shows corporate defaults are going to come in thick and fast, according to Goldman Sachs. The iTraxx Europe Crossover, an index of junk bonds , suggests annual default rates of 7-9% in European high-yield debt, compared with an average of 1-5% since 2010, Goldman said. The index is currently around 460 basis points, its lowest since August, compared with around 96.85 bps for the iTraxx Europe investment grade index .
The annualised default rate only got above 7% in the early 2000s and the great financial crisis, the bank said. While the high-yield market looks precarious, investment grade appears a better bet. "We think European credit screens as a very attractive long, stand-alone and cross-asset-wise," Goldman said in a note to clients.
PHARMA DELIVERS HEALTHY START TO THE DAY (0847 GMT)
European shares have opened in the green, with the DAX hitting its highest in five months thanks to hefty gains in the pharma sector, where Merck KGaA is leading the charge, with a 5% rally. Rivals Novo Nordisk and AstraZeneca are topping the STOXX 600 leaderboard on a weighted basis, rising 1.9% and 1.5%, respectively, while at the other end of the spectrum is Switzerland's Roche, which is down 4.7% in its largest one-day drop in six months. The company said its Alzheimer's drug candidate could not clearly be shown to slow the progression of dementia. The STOXX 600 is up around 0.3%.
On the flipside, media stocks are the best performers on a sectoral basis, with the STOXX 600 Media index up 1.2% thanks to London-listed events organiser Informa roaring as much as 8.8% higher after raising its fiscal year outlook, while miners are up 0.5% following a jump in iron ore prices after China lay out more measures to help its struggling real estate sector.
DON'T GET CARRIED AWAY (0818 GMT)
Markets have got all excited after last week's rip-roaring rally in global equities, a big tumble in U.S. Treasury yields and a bruising sell-off in the mighty dollar.
But don't pop the champagne just yet.
Federal Reserve Gov. Christopher Waller said on Sunday that the Fed may consider slowing the pace of rate increases at its next meeting but that should not be seen as a "softening" of its battle against inflation.
While U.S. consumer prices rose less than expected in October, pushing the annual increase below 8% for the first time in eight months, Waller said the markets shouldn't get carried away over just one "data point."
The comments tempered gains in Asian equity markets on Monday, though Hong Kong and Chinese stocks outperformed as China fine-tuned COVID-19 control measures and regulators ordered more financing support for the beleaguered real estate sector.
And days before the announcement of a budget plan, British Finance Minister Jeremy Hunt said he will set out tax rises and spending cuts to show Britain can fix its public finances and restore its economic credibility.
At least the sporting world brought good news for England after Captain Ben Stokes held his nerve with an unbeaten half-century on Sunday, helping England claim their second Twenty20 World Cup title with a five-wicket win over Pakistan.
This week, U.S. retail sales will dominate the data calendar, while markets will also pay attention to euro zone flash Q3 GDP estimates.
As the G20 summit kicks off in the Indonesian island of Bali on Tuesday, U.S. President Joe Biden is set to meet Chinese leader Xi Jinping in person for the first time since taking office, with U.S. concerns over Taiwan, Russia's war in Ukraine and North Korea's nuclear ambitions on top of his agenda.
In the crypto world, after Friday's shocking collapse of cryptocurrency exchange FTX, Bahamas authorities said they were scrutinising the demise of the exchange, co-founded by 30-year-old Sam Bankman-Fried.
And finally, on the European corporate front, German military equipment manufacturer Rheinmetall agreed to acquire Spanish explosives and ammunition maker Expal Systems for an enterprise value of 1.2 billion euros.
Key developments that could influence markets on Monday:
Economic data: Euro zone Sep inflation final
Biden-Xi meeting
G20 leaders summit to Nov. 16th
Biden-Xi meeting
Fed's Brainard speaks
EUROPE CAUTIOUSLY OPTIMISTIC (0735 GMT)
European stock index futures are pointing to a modestly higher start today, but the mood is a lot more cautious. Last week's U.S. inflation data for October unleashed the biggest weekly rally in global stocks in two years, but the party might not last long. Fed Reserve Governor Christopher Waller said on Sunday that it was "just one data point" and the central bank is going to need a lot more where that came from to be convinced to take its foot off the gas. After an upbeat session for equities in Asia, where China has relaxed some of its tough COVID restrictions, STOXX 50 futures are up 0.4%, while FTSE futures are 0.2% higher and DAX futures are up 0.3%.
Traders see Roche opening as much as 5% lower after the Swiss pharma group said its Alzheimer's drug candidate could not clearly be shown to slow dementia progression, while miners look to make some headway after a jump in iron ore prices after China laid out some support measures for the struggling real-estate sector. UK-listed events organiser Informa looks set to gain after upbeat results.
