Volatility will be the watchword for European equity markets next week as a lack of corporate news looks set to leave stocks adrift and vulnerable to jitters about U.S. subprime lending losses.
"The problem for next week is we have so little corporate news, apart from M&A activity, to hang our hats on," David Buik, marketing director at Cantor Index, told CNBC.com. "Until we are confident the subprime problem is within control … we are going to expect very volatile trading conditions."
Investors could get direction on the future of Airbus-owner EADS when a Franco-German summit gets underway Monday. French President Nicolas Sarkozy and German Chancellor Angela Merkel will be in attendance, but the exact agaenda of the summit is not yet known.
A few earnings will be filetering through to the market with Dutch technology company Philips, French plastic-product-maker Bic and Swedish cell-phone retailer Ericsson all reporting results.
On the economic front, German business sentiment is expected to have weakened for the second month in a row when the ZEW index is release at 10 am Tuesday. Economists surveyed by Dow Jones Newswires expect the index to fall to 19.2 from 20.3 in June.
The Bank of England will publish the minutes from its recent rate-hiking meeting Wednesday, and the European Central Bank's governing council will meet on Thursday, but no interest rate decision is due.
And the much awaited final novel in JK Rowling's Harry Potter series is hitting U.K. shelves at 8 pm London time, giving young-at-heart traders the perfect excuse to close out positions early and take Friday off.