European Stocks Dip Ahead of Central Bank Action
European stocks declined on Monday as investors awaited central bank action this week. The Stoxx Europe 600 Index dropped 0.4%, with the U.K.’s FTSE 100 Index and Germany’s DAX Index both down 0.3%.
Central Bank Meetings
The European Central Bank and Bank of England are both scheduled to meet this week. Investors are expecting the ECB to provide more details on its bond-buying program, while the Bank of England is expected to keep its benchmark interest rate unchanged.
The ECB is expected to announce a new bond-buying program, which could include purchases of corporate bonds. The central bank is also expected to provide more details on its existing bond-buying program, which has been in place since March.
Market Impact
The central bank action is likely to have a significant impact on the markets. The ECB’s bond-buying program has been credited with helping to stabilize the markets in the wake of the coronavirus pandemic.
The ECB’s bond-buying program has also been credited with helping to keep borrowing costs low for governments and companies. Low borrowing costs have helped to support economic activity in the region.
Sectors
The banking sector was the biggest loser on Monday, with shares of Deutsche Bank AG and Commerzbank AG both down more than 1%.
The technology sector was the biggest gainer, with shares of SAP SE and Infineon Technologies AG both up more than 1%.
Currencies
The euro was little changed against the U.S. dollar, trading at 1.1850. The pound was also little changed, trading at 1.3170.
Commodities
Oil prices were higher on Monday, with Brent crude trading at $43.50 a barrel. Gold prices were also higher, trading at $1,937 an ounce.
Outlook
Investors are likely to remain focused on the central bank action this week. The ECB’s bond-buying program is expected to have a significant impact on the markets, and investors will be looking for more details on the program.
The Bank of England is also expected to keep its benchmark interest rate unchanged, which could have an impact on the markets.
Overall, investors are likely to remain cautious ahead of the central bank meetings this week. The markets could see significant volatility depending on the outcome of the meetings.