Europe open: Stocks flat with inflation data in focus
Stocks took a breather following the previous session's Trump-inspired outsized gains and following a brief foray into the green at the opening bell, as traders' focus shifted towards euro area consumer price data due out later in the morning.
As of 0825 GMT the benchmark Stoxx 600 was edging lower by 0.03% to 375.59, the German Dax was off 0.09% to 12,055.07 and the FTSE Mibtel was down 0.09% at 19,347.72.
The latest monthly Eurozone inflation data was expected to show the cost of living rose at a 2.0% year-on-year clip in February, up from 1.8% in the month before and closer to the European Central Bank´s target for CPI to be close to but below 2.0% over the medium-term.
That, some analysts argued, meant the ECB should perhaps throttle back on its easy monetary policy.
Nevertheless, at the 'core' level, which excludes items such as energy, CPI was expected to have risen by 0.9% annualised, unchanged from the month before.
Therefore other analysts believe the central bank was right to 'look through' the short-term inflation rise even if it meant that so-called 'real' or inflation-adjusted bond yields were in some cases now deeply into negative territory -- particularly in Germany.
Commenting on the situation, Michael Hewson, chief market analyst at CMC Markets UK, said: "Today’s EU flash CPI numbers for February could well heap further pressure on ECB President Mario Draghi ahead of next week’s ECB rate meeting to dial back on the stimulus and raise the prospect that a tapering to bond buying may be required before the year is out. He ruled that out at the last meeting but with German real yields approaching -3%, the pressure to act will likely take on a political dimension the closer to the German elections we get."
Eurostat will release the February euro area CPI numbers at 1000 GMT.
Traders have begun to seriously ponder the possibility of a March interest rate hike by the US central bank when its chiefs met on 15 March, as rate-setters in the States moved to curtail the risk of falling 'behind the curve' -- especially should the new US administration opt for outsized government spending.
Of course, it was not lost on traders that both higher GDP in the States and a stronger US dollar (and weaker euro) might at one point also factor into the ECB's own thinking.
Against that backcloth, markets would also be keeping close tabs on a speech later in the day from Loretta Mester, the President of the regional Fed bank of Cleveland. However, while she had very good credentials as a long standing policy-hawk, she was not a voter on this year's Federal Open Market Committee.
Italian banks still in focus
In a watershed announcement, Allied Irish Banks proposed a €250.0m dividend payout, the first by any lender from the Emerald Isle since the financial crisis and said it was readying an IPO.
Anheuser-Busch InBev reported its first drop in operating earnings on an EBITDA basis in over a decade as Brazil's recession-wracked economy led to much lower sales of beer in South America's largest economy.
Capital Research & Management consolidated its position as the main shareholder in UniCredit, by pushing its stake past 8%, La Stampa reported.
Private equity outfit Helmann & Friedman and Singapore's sovereign wealth fund GIC were seen as the most likely to make off with Intesa Sanpaolo and Banco Santander's Allfunds, Il Sole 24 Ore reported.