European Shares to Open Flat, BOE’s Tucker Faces UK Lawmakers
European shares were set for a flat open on Monday ahead of a euro zone finance ministers meeting in Brussels to flesh out plans to reinforce the single currency.
The FTSE was called to open 5 higher, but the DAX was expected to open 1.5 points lower and the CAC 40 was seen opening lower by 1 point, having both been called to open higher earlier in the morning.
The talks in Brusselsmay do little more than highlight the limitations of last month's deal to help indebted states and banks.
Decisions on banking supervision, how to use euro zone bailout money, aid to Spain and Cyprus and whether to grant concessions to Greece are likely to take months to finalize, while pressure for action is growing.
However, ECBPresident Mario Draghi will testify to the European Parliament before ministers meet, and after cutting rates last week could signal more dramatic measures to help Europe such as buying government bonds or flooding banks with fresh liquidity.
The meeting follows an appeal from the Spanish prime minister on Saturday for the European Union to act swiftly on agreements reached at the June leader’s summit which included plan to empower the euro zone’s bailout fund to recapitalize banks directly.
"What will determine the real success of the European Council is that those decisions become concrete and palpable results and in a way that is agile, rapid, and effective for all to see," Rajoy said on Saturday.
Asian markets fell on Monday after non-farm payroll figures out of the U.S. on Friday showed only a slight improvement in the number of jobs created in the word’s largest economy.
China's annual consumer inflationcooled to 2.2 percent in June, from May's 3.0 percent, official data showed on Monday, giving Beijing more scope to ease monetary policy to support growth without stoking upward price pressures. Economists polled by Reuters had forecast inflation to ease to 2.3 percent in June.
The National Bureau of Statistics said China's producer price index dropped 2.1 percent last month from a year earlier, sharper than forecasts for a 1.9 percent decline.
The figures, while not bad enough to prompt immediate remedial action by the Federal Reserve, nonetheless increased the chances of the U.S. central bank taking further monetary policy action to boost growth sooner rather than later.
Elsewhere, Barclays Bank board of directors is considering breaking the bank into two units before regulators force it to, according to a report in the London Sunday Times.
The newspaper claimed Barclays was considering spinning off its investment arm Barclays Capital and floating it as a new entity in New York, with the retail aim of the bank remaining in London.
The Bank of England’s deputy governor Paul Tucker will face questions from British lawmakers on Mondayabout his involvement in the London Interbank Offered Rate (Libor)rate fixing scandal.
Tucker, seen as a potential successor to current Bank governor Mervyn King, will face the Parliamentary Treasury Select Committee at 10:30 a.m. (CET).
Tucker’s testimony follows an intervention by the business secretary Vince Cable on Sunday in which he said former CEO Bob Diamond’s payoff from Barclays should be limited to prevent another "outrage", while conceding there was nothing the government could do to block the pay off.
Diamond could be in line for exit payments of as much as 17 million pounds ($263 million).
Airbus said it has started cutting metal--the first stage of a production process--for a more fuel-efficient version of its best-selling A320 single-aisle airliner on the eve of the Farnborough airshow on Sunday.
Also at Farnborough, Boeing chief executive Jim McNerney said he expected the U.S. planemaker to outsell Airbus for "a number of years" having trailed its European rival for nearly a decade he told the Independent newspaper: "I think we will, in all likelihood, pull slightly ahead of them (Airbus), either this year or next...But, you know, over the years we've been ahead sometimes; they've been ahead recently. And I think there's a good chance that we will pull ahead for a number of years."
And Canada's Bombardier is in talks with AirAsia about a more densely packed 160-seat version of its CSeries jet, in a surprise bid to loosen the stranglehold on Asia's largest low-cost carrier held by European giant Airbus.
AirAsia founder and Formula One boss Tony Fernandes discussed the proposal with Bombardier's chief executive Pierre Beaudoin during preparations for Sunday's British Grand Prix at Silverstone, the two company leaders told Reuters on the eve of the Farnborough Airshow.