Trading in European stock markets was calm yesterday as investors waited on this week’s interest rate call in the eurozone and crucial jobs data in the United States.
The European Central Bank (ECB) will unveil the outcome of its latest monetary policy gathering on Thursday, with no change expected in borrowing costs.
In London, the FTSE 100 closed down 0.2% to 7,338.99 points; Frankfurt — DAX 30 edged up 0.06% to 11,966.14 points and e)
Paris — CAC 40 fell 0.4 % to 4,955.00 points at the close yesterday.
Traders will then zero in on this Friday’s eagerly-anticipated US non-farm payrolls (NFP) data, a key indicator for the health of the world’s biggest economy, ahead of next week’s Federal Reserve interest rate meet.
Markets had been given a shot in the arm last week by hopes of a US spending spree under Trump, but are now looking for fresh signals.
“Wait-and-see mode for now. The ECB might deliver some fresh impetus on Thursday but think we’ll be looking for the US to lead the way,” said ETX Capital analyst Neil Wilson.
Further impetus came as Federal Reserve Chair Janet Yellen signalled last Friday that an interest rate increase could be on the way this month — if US employment and inflation remain in line with expectations.
Analysts interpreted that as a clear sign that the central bank will raise the benchmark lending rate at the March 14-15 policy meeting.
In foreign exchange activity, the European single currency has been on the back foot since Friday, also dented by uncertainty over the French presidential elections.
Most Asian markets rose yesterday in cautious deals over Trump as well as geopolitical risks.
While Trump’s speech to Congress last week fired optimism that he would press on with a big-spending, tax-cutting programme, he has yet to flesh out his plans.
On the downside, Tokyo stocks shed 0.2%, extending Monday’s losses that came after North Korea’s quadruple missile launch, three of which landed in Japanese-controlled waters, stoking regional security fears.
A tweet by US President Donald Trump promising lower drug prices for consumers proved to be a bitter pill for pharmaceutical stocks yesterday.
In a posting on Twitter shortly before the markets opened in New York, Trump said he was “working on a new system where there will be competition in the drug industry”.
“Pricing for the American people will come way down!” he wrote.
While Wall Street’s broad S&P 500 market index was off just 0.3% in late morning trading, shares in leading drugmakers were down considerably.
Shares in Mylan NV, whose EpiPen allergy shot was at the centre last year of public outrage over drug prices, fell 2.0 % to $43.18.
Stock in Botox-maker Allergan shed 1.6% to $238.42.
Pfizer shares gave up 1.0% to $34.02 and Merck 0.7% to $66.03.
“Donald Trump has ensured he remains the number one driver of volatility within the markets, with the president’s latest tweet dragging pharmaceutical firms lower today,” said market analyst Joshua Mahony at online trading firm IG.
“Trump’s promise to control drugs prices highlights that the optimism felt in response to Hilary Clinton’s election loss was clearly misplaced, proving that the topic remains one rare bipartisan area of agreement,” he added.
Shares in European pharmaceutical makers also suffered.
Visitors pass a sign inside the London Stock Exchange. The FTSE 100 closed down 0.2% to 7,338.99 points yesterday.