Europe midday: Stocks drift lower as investors eye key Fed speech

Stocks in Europe are moving lower as investors wait on a potentially key speech for financial markets from the head of the US central bank.

"The big day has arrived, and markets are settling in ahead of Jerome Powell’s key speech on monetary policy," said IG chief market analyst Chris Beauchamp.

"But of course it has been so widely-trailed and dissected already that the risk for markets may be that we now face a period of reversal, with equities giving back some gains and the dollar back in favour once again."

As of 1221 BST, the benchmark Stoxx 600 had dipped 0.34% to 371.85, while the Dax was drifting lower by 0.37% to 13,141.03 and the FTSE Mibtel was down by 0.78% at 19,979.77.

Overnight, the S&P 500 and Nasdaq Composite hit fresh record highs, although some market observers were cautious regarding the outlook for corporate credit markets in particular which they said might end up taking their toll on equities.

The latest batch of economic data was largely upbeat.

In France, INSEE manufacturing sector confidence gauge soared past forecasts rising from a reading of 82 points in July to 93 for August (consensus: 86).

At the euro area level meanwhile, the European Central Bank reported that the annual rate of expansion in M3 money supply picked up from 9.2% for June to 10.2% in July (consensus: 9.2%).

Claus Vistesen, Pantheon Macroeconomics's chief economist, said the figures laid a strong foundation for a continued rebound in growth over the back half of the year.

He also pointed to still solid trends in lending to non-financial corporates, while noting that consumer credit growth was now slowing.