Europe midday: Stocks waver ahead of Fed's Yellen speech, euro gains
European stocks were a mixed bag on Friday as investors awaited speeches from several US Federal Reserve officials, including chair Janet Yellen, while the euro gained amid a hodge-podge of global economic data.
At midday, the benchmark Stoxx Europe 600 index was down 0.13% to 375.11, Germany’s DAX was flat at 12,054.33 and France’s CAC 40 rose 0.66% to 4,996.44.
Meanwhile, Brent crude rose 0.43% to $55.32 per barrel and West Texas Intermediate was 0.34% firmer at $52.79.
In currency markets, the euro was up 0.32% against the dollar to 1.0541 and was 0.67% stronger versus the pound to 0.86223.
There are suggestions that the Fed will hike interest rates at its next meeting on 14-15 March as investors looked towards a raft of Fed officials speaking on Friday.
Chicago Fed President Charles Evans and Richmond Fed President Jeffrey Lacker are both due to give speeches at 1515 GMT, while board member Jerome Powell will speak at 1615 GMT. Vice Chair Stanley Fischer will deliver a speech at 1700 GMT and Fed Chair Janet Yellen is due to speak at 1800 GMT.
Craig Erlam, senior market analyst at Oanda, said: “The week has already been dominated by the US central bank, with a large number of Fed officials making public appearances ahead of the blackout period – which starts tomorrow – and voicing their support for a rate hike very soon.
"Investors may have been slow on the uptake to begin with but the last week really has driven home the coordinated message that not only is a rate hike imminent but that it could come at the meeting in two weeks. This has forced investors to radically change their expectations for the meeting with the implied odds rising dramatically from below 20% not long ago to above 75% now."
The euro again found support against the dollar around 1.05, the third time it has done so in recent weeks.
But, said Erlam, given the political risk in the region ahead of some big elections and the run that the dollar has been on, "I wonder how long this will last".
On the data front, eurozone services data confirmed the strong readings from the flash estimates released last week, with Germany in line, France revised down and Italy upwards. The Composite purchasing managers’ index from Markit confirmed the strong reading from the flash estimate at 56.0 and services 55.5, down marginally from the estimate of 55.6.
Eurozone retail sales fell 0.1% month-to-month in January when the market had forecast a 0.3% increase. The year-on-year rate was unchanged at 1.2%. While it was a downbeat headline, the data was more uncertain than usual as it did not include Spain, Italy, the Netherlands, Greece and Ireland.
In corporate news, London Stock Exchange Group fell 0.83% as it reported strong sales and profits growth and hiking its dividend 20% to reassure investors of its confident outlook despite the seemingly likely collapse of its merger with Deutsche Borse.
AstraZeneca rose 0.6% after saying it has partnered with French pharmaceutical Sanofi to develop and commercialise a respiratory syncytial virus antibody.
Budget airline Ryanair was down 0.38% after it reported a 10% rise in traffic for February.
Advertising giant WPP slumped 7.74% as it posted a rise in full-year profit but said it expects growth to slow this year.