European stocks are expected to fall. At the beginning of the week,  the Eurostoxx 50 posted 4,083.37 points down 1.80%, the CAC 40 opened at 6,569.16 points with a decline of 1.46%, the DAX 30 at 15,448.04 points (-1.78%), the FTSE 100 at 7,017.47 points (-1.90%), the SMI  at 11,941.25 points (-0.58%), the AEX at 719.63 points (-2.08%), the BEL 20 at 4,137.78 points (-1.58%), the IBEX 35 at 9,030.60 points (-1.80%), the DJIA at 33,290.08 points (-1.58%), the Nasdaq  at 14,030.38 points (-0.92%), the S&P 500 at 4,166.45 points (-1.31%), the Nikkei 225 at 27,933.27 points (-3.56%).

The Exchange Rate at 06:50 opens lower. EUR/USD posted 1.1861 (-0.03%), EUR/JPY  130.22 (-0.42%) and USD/JPY 109.80   (-0.40%).

Investors will follow the news on Monday from the Paris Air Forum, where many leaders of the aviation sector will speak. Vivendi announced Sunday evening that it has signed an agreement for the sale of 10% of the capital of its record company Universal Music Group (UMG) to Pershing Square Tontine Holdings, the listed investment vehicle, or Spac, of billionaire William Ackman. The price of this transaction is based on an enterprise value of €35 billion for 100% of UMG's capital. The operation should take place no later than September 15, said the media and entertainment group in a statement.

European equity markets are expected to open lower on Monday, in the wake of Wall Street's pullback on Friday, as investors factor in the possibility that the Federal Reserve (Fed) will raise rates earlier than expected. At 7:40 a.m., the CAC 40 futures contract was down 25 points, or 0.4%, according to data from broker IG Markets. The CONTRACT on the DAX 30 lost 129 points, or 0.8%, and the FTSE 100 contract gave up 52.5 points, or 0.8%. Wall Street closed sharply lower on Friday after a week-long correction for industrial stocks, as investors adjust their portfolios after the Less dovish tone of the Federal Reserve (Fed). The Dow Jones Index (DJIA) lost 1.6%, or 533 points, to 33,290.08 points. The broader S&P 500 index lost 1.3% to 4,166.45 points, ending three consecutive weeks of gains. The Nasdaq Composite gave up 0.9% to 14,030.38 points. For the week as a whole, the Dow Jones index lost 3.5%, its biggest weekly decline since last October. The S&P 500 fell 1.9%, while the Nasdaq limited its weekly decline to 0.3%.

After the Fed's announcements on Wednesday, investors are increasingly convinced that the central bank will act to curb rising inflation. Fed members are now projecting two interest rate hikes in 2023, up from none before 2024 at the previous meeting. This more restrictive tone, which has notably contributed to a strong rise in the dollar, encourages investors to revalue their portfolios by abandoning cyclical stocks, such as banks and industrial groups, in favor of growth stocks such as technology. Heightening investor concerns, James Bullard, the president of the St. Louis Fed, said Friday that he expects a first rate hike in 2022, earlier than the median projection released Wednesday by the U.S. central bank.

In this context, investors will follow a new intervention on Monday by James Bullard, who will be alongside The Presidents of the Philadelphia and Dallas Feds, Patrick Harker and Robert Kaplan, at a virtual Fed seminar. At 9:00 p.m., New York Fed President John Williams will also deliver a speech. In the euro zone, the President of the European Central Bank, Christine Lagarde, will be heard, from 4.15 p.m., by the European Parliament's Committee on Economic and Monetary Affairs. In the wake of Wall Street, Asian stock markets fell on Monday morning. In Tokyo, the Nikkei index gave up 3.6% at the end of the session. The Hong Kong Stock Exchange's Hang Seng Index was down 1.6 percent and the Shanghai Composite was down 0.2 percent.

Long-term U.S. Treasury yields continue to decline on Monday, while the two-year stock continues to rise after hitting its biggest weekly rise in nearly two years on Friday. As a result, the yield curve is flattening. Friday's moves in the bond market were triggered by remarks by St. Louis Federal Reserve Chairman James Bullard, but they had partly begun after the Fed meeting that adopted a relatively restrictive tone on Wednesday.

The euro shows a slight decline against the dollar on Monday morning as risk aversion dominates the markets. Financial markets remained focused on the Fed's interest rate projections last week and the situation is expected to be the same this week. The words of John Williams on Monday and Fed Chairman Jerome Powell, who will speak tuesday before the House of Representatives, are particularly awaited. Signs that the Fed's monetary policy committee is increasingly uncertain about the outlook for inflation are important for monetary policy and can support the dollar, the bank said, adding that any increase above PCE index expectations, which measures inflation related to U.S. household consumption, expected on Friday, would also be favorable to the dollar.

Oil contracts continue to rise on Monday, with the election of ultra-conservative Ebrahim Raisi as Iran's president leading investors to believe that the return of Iranian oil to the markets could take longer than anticipated. At 7:30 a.m., the August contract for North Sea Brent gained 19 cents to $73.70 a barrel and the July contract for Nymex-listed light sweet crude (WTI) gained 26 cents to $71.90 a barrel.