The European stock markets have been characterized by a tense, watchful calm. Stocks opened to mixed and listless pictures as investors held their breath.
The calm before the storm is a market that has been suspended in anticipation of the double barrelled verdict from the European Central Bank, Frankfurt, and more importantly, the high stakes report on inflation in the United States.
The pan-European Stoxx 600 Index hovered around flat soon after the opening bell. It was a picture o utter indecision, with no discernible trend between major sectors and bourses.
The gains made in Japan were record breaking, but this optimism has not been able to reach Europe.
The glimmering of luxury on a still sea
One area of high-stakes corporate drama stands out in a market that is otherwise paralyzed with anticipation. The shares of French luxury giant Kering, owner of Gucci added two percent to the Stoxx 600 in early trading.
Investors are applauding the move as an example of strategic patience, capital discipline and patience.
The verdict is in on the transatlantic tightrope
Kering’s news is, in fact, a mere sideshow. The main story of the day will be announced later. Investors are primarily focused on the European Central Bank’s latest interest rate announcement.
The central bank will not be changing its current key deposit rate of 2 percent. However, investors are closely watching its most recent macroeconomic forecasts to see if there is any indication that it has changed its mind.
The data that will move the markets the most, however, is likely to come from the other side of the Atlantic. Wall Street awaits the release of August’s consumer price index, a report which will have a huge impact on the Federal Reserve.
Dow Jones polled economists who expect a monthly rise of 0.3 per cent, which would leave annual inflation at a stubbornly high level.
The CPI is a crucial indicator, and it comes one day after an unexpected drop in the Producer Price Index. This dovish development has given rise to hopes that Fed can deliver a rate reduction at their meeting next week.
A nervous market is waiting for an answer to the current impasse.
The post Europe Markets Open: Stoxx 600 Flat as markets prepare for ECB Decision may be updated as new developments unfold.
