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Wednesday, 7 August 2013
Europe Stocks Drop as Investors Watch BOE After Fed Talk
By Sofia Horta e Costa - Aug 7, 2013 12:55 PM GMT+0400
European stocks fell for a second day as investors turned to the Bank of England for its interest-rate guidance and widening of stimulus measures after Federal Reserve officials signaled they may pare bond purchases. U.S. index futures and Asian shares also slid.
Natixis SA tumbled the most in a month after reporting a 29 percent decline in second-quarter profit. Rexel lost 3.9 percent after its largest shareholder sold a stake. ING Groep NV (INGA)surged to a two-year high after quarterly pretax profit rose.
Aug. 7 (Bloomberg) -- Rob Wood, an economist at Berenberg Bank, discusses the outlook for Bank of England Governor Mark Carney's first inflation report today, interest rates and expectations for the U.K. economy. He speaks with Mark Barton on Bloomberg Television's "Countdown." (Source: Bloomberg)
Aug. 7 (Bloomberg) -- Nick Hungerford, chief executive officer of Nutmeg.com, talks about the outlook for Bank of England Governor Mark Carney's inflation report today and U.K. equities. He speaks with Mark Barton on Bloomberg Television's "Countdown." (Source: Bloomberg)
The Stoxx Europe 600 Index declined 0.2 percent to 302.95 at 9:52 a.m. in London, after earlier falling as much as 0.7 percent. The benchmark has rallied 9.9 percent from a low on June 24 as central banks in Europe and the U.S. pledged to keep interest rates low. Standard & Poor’s 500 Index futures retreated 0.3 percent, while the MSCI Asia Pacific Index slumped 2 percent.
Bank of England Governor Mark Carney will today talk about how the central bank plans to continue providing stimulus to the economy. In his first press conference since taking office in July, Carney will give details of policy makers’ view on interest rates in the future and the institution of thresholds to govern quantitative easing. The BOE’s Monetary Policy Committee will release its inflation and output projections.
The MPC last week voted to maintain the bank rate at 0.5 percent, the level it has been held since March 2009, and the stock of asset purchases at 375 billion pounds ($575 billion). Carney had said last month that interest-rate increases implied by market rates were not warranted by economic developments.
Fed Bank of Chicago President Charles Evans, a proponent of monetary stimulus, said late yesterday he would not rule out a decision to begin reduce bond purchases beginning September.
“We’ve seen good improvement in the labor market, there’s no question in my mind about that,” Evans said in a meeting with reporters in Chicago. “I’m still wanting to see greater evidence that it’s a sustainable improvement.”
Fed Bank of Dallas President Richard Fisher, one of the most vocal critics of quantitative easing, had said Aug. 5 that policy makers were “closer to execution mode” in considering the right time to begin reducing purchases.
Data today may show industrial output in Germany, Europe’s largest economy, added 0.3 percent in June after dropping 1 percent in May, economists surveyed by Bloomberg predicted before the Economy Ministry releases the figures at noon in Berlin.