News Column

European Shares Seen Subdued Ahead Of ECB Meeting

June 2, 2014

VIENNA (Alliance News) - European stocks are seen opening on a cautious note Tuesday heading into Thursday's ECB meeting. While many analysts expect the European Central Bank to take some policy action to avoid deflation and spur lending to credit-starved smaller businesses, markets are still uncertain what additional measures it will announce.

Crucial reports on EU consumer prices and unemployment as well as house prices and construction activity data from the UK are slated for release in the European session as investors gear up for the ECB meeting. Across the Atlantic, the Commerce Department is due to release its report on factory orders in April later in the global day.

Asian stocks are trading mostly higher after another manufacturing survey suggested the slowdown in the world's second-largest economy is stabilizing. An HSBC survey showed its gauge of nationwide manufacturing activity rose to a final reading of 49.4 in May from 48.1 in April, although activity remained in contraction territory.

Separately, China's service sector grew at its fastest pace in six months in May, government figures showed, allaying fears of a sharp slowdown. The non-manufacturing PMI rose to 55.5 from 54.8 in April.

The Australian dollar strengthened after the central bank left interest rates on hold, in line with expectations. US crude futures are little changed following mixed data out of China, while gold prices are marginally lower, extending a five-day losing streak as higher equities curb safe-haven demand.

In domestic corporate news, British lender Barclays PLC will start to eliminate 100 jobs across its Asia-Pacific investment banking and markets businesses this week, the Bloomberg reported, citing a person with knowledge of the matter.

Swiss bakery business Aryzta AG reported a 16.7% growth in its total group revenue to 1.37 billion euros for the third quarter ended April 30, 2014.

European stocks ended mostly higher on Monday, as miners rallied boosted by upbeat Chinese manufacturing data and weak euro-zone manufacturing and German inflation figures added to expectations the ECB will ease its policy stance at its Thursday meeting. The German DAX edged up 0.1% and the UK'sFTSE 100 rose 0.3%, while France's CAC 40 ended marginally lower.

US stocks ended mixed showing little change overnight after the Institute for Supply management issued two corrections to its monthly manufacturing report, leaving investors confused. A separate report from the Commerce Department showed that construction spending increased modestly in April, helped by increase in home building and government construction that lifted total activity to the highest level in five years.

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Source: Alliance News

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