Europe open: Stocks edge lower ahead of Yellen speech

European stocks edged lower in early trade as investors awaited a speech by Federal Reserve Chair Janet Yellen at Jackson Hole.

At 0840 BST, the benchmark Stoxx Europe 600 index was down 0.3%, while Germany’s DAX and France’s CAC 40 were both 0.4% weaker.

At the same time, oil prices were little changed. West Texas Intermediate was flat at $47.35 and Brent crude was down 0.2% at $49.55.

Lee Wild, head of equity strategy at stockbroker Interactive Investor, said: “It's the big day. In just a few hours, Fed chair Janet Yellen will finally put the market out of its misery and deliver her hotly-anticipated speech at the annual summer camp for central bankers at Jackson Hole. Investors have been reluctant to trade ahead of this keynote address, and, really, who'd be a buyer before the news, expected mid-afternoon Friday.

"If we don't get a much clearer idea of whether US interest rates are going up or not next month, we'll have another four weeks of this ridiculous circus. With Fed committee members rarely missing a chance to tell the world what they think, any change in rate expectations has a massive impact on equity markets. Now, the mood seems to be shifting toward a rate hike on September 21st. That could have serious implications for the dollar and is something not yet fully priced in by the market.”

On the corporate front, Gemalto racked up healthy gains following the release of its second-quarter numbers, while Volkswagen advanced on news of a diesel-related settlement with US dealers.

BAE Systems was up after Berenberg upgraded the stock to ‘buy’ from ‘hold’ saying it expects a material order book uplift.

Restaurant Group was a high riser after saying it swung to a pre-tax loss in the first half on the back of restructuring costs and announcing the closure of 33 outlets.

Media group Vivendi was in the red after it posted a drop in second-quarter adjusted net income and said it will cut €300m in costs from its pay-TV unit.

On the macroeconomic front, eurozone money supply is at 0900 BST. In the US, the second release of second-quarter GDP is at 1330 BST, while University of Michigan consumer sentiment is at 1500 BST.

Yellen is due to give her speech at Jackson Hole at 1500 BST.