European Stocks Slip

last updated on

European Stocks Slip

European Stocks Slip Ahead Of Ecb Meeting

Most of the EU stock markets were lower on Tuesday as investors have now adopted a more cautious ahead of the ECB policy meeting.

At the upcoming European Central Bank meeting, the interest policy will take center stage as the officials will contemplate whether to cut the rates or go with a hike.

The Dax (Germany) index lost 0.6%, while the CAC 40 was down by 0.6% for the day. Similarly, the FTSE 100 from the UK showed a decline of 0.5%. The overall environment in the EU stock markets remained bearish, which shows that the market's mood has become cautious.

0.25% Rate Cut Expected From Ecb

If we look back, the EU equities showed three consecutive gains starting on Monday. However, that confidence has now changed with some nervousness as the market looks toward the upcoming ECB meeting.

According to the forecast, the ECB will likely cut the rates by 25 bps, and it is now a done deal for the most part. After all, many ECB officials have hinted at this possibility. However, the inflation situation seems to be flaring up again, which could complicate things for the ECB.

During the month of May, a 2.6% y/y increase was seen in consumer prices in the EU. This is a sign that the inflation is slowly moving away from the 2% target of ECB.

Up ahead, there's no noteworthy data besides the unemployment numbers from Germany. This means the chief catalyst is still the ECB meeting and the outcome arising from it.

Elsewhere, the JOLTS report from the USA could also provide insight into the US labor market. A weakness in the US markets will also affect the EU equities market.

In fact, the Fed policy meeting is scheduled for next week, along with the payroll report (NFP). So, while it may not be directly related to the EU, it will most definitely have some effect on the EU equities.

Trending Stories