The pan-European Stoxx 600 provisionally closed down by 0.8% on Wednesday, with autos shares sinking 1.9% to lead the losses. The benchmark was still up over 13% year-to-date, however. European investors reacted to a host of economic data on Wednesday. U.K. first-quarter GDP was confirmed at -1.6% quarter-on-quarter, slightly below expectations, while business investment fell 10.7% quarterly as the country endured stringent lockdown measures.
The Office for National Statistics also revealed that British household savings grew sharply during the period, lifting hopes of pent-up consumer spending as the economy reopens. Euro zone inflation cooled in June to 1.9% from 2.0% in May, in line with forecasts and the European Central Bank’s target of “close to but below 2%.” However, it is expected to spike above 2.5% again towards the end of the year, according to the ECB’s latest projections.
Global markets are looking ahead to potentially significant U.S. labor market data later in the week, hoping to gauge whether the U.S. Federal Reserve will be forced to consider tightening monetary policy sooner than planned. The Labor Department’s key jobs report is due Friday. Shares in Asia-Pacific were modestly higher on Wednesday despite a slowdown in China’s official manufacturing Purchasing Manager’s Index (PMI), while U.S. stocks churned near record highs.
In corporate news, the European Commission on Tuesday announced that it had begun an in-depth study of British Airways parent IAG’s planned takeover of Spain’s Air Europa. IAG shares were slightly higher by the close.
Source: FXPro