European Markets Cautious On Euro Zone Uncertainty
European shares are called to open cautiously Monday after mixed signals from euro zone politicians and officials over the weekend.
The German DAX is called to open down 6 points at 6,965, the French CAC 40 down 4 points at 3429 and the Spanish IBEX up 13 points. London markets are closed on Monday for a public holiday.
The German Chancellor Angela Merkel is the latest euro zone leader whose words are being scrutinized for clues on what direction the European Central Bank (ECB) is likely to take when policy makers meet on September 6.
On Sunday, Merkel attempted to soothe growing tensions over Greece in her country when she warned German politicians not to speculate on Greece’s departure. Speaking to the German broadcaster ARD she said that during this “decisive phase” in combating the euro zone crisis it was counter-productive to talk about a possible Greek exit from the single currency , “My plea is that everyone weigh their words very carefully,” she said.
Shares have rallied recently on expectations that the ECB will introduce a bond buying scheme to help struggling economies with their borrowing costs, though there have been mixed signals coming from euro zone policy makers as to whether the scheme will go ahead.
There are growing fears that Greece is not the only country looking to ECB funds for its survival. In an interview with Der Spiegel magazine on Sunday, Jens Weidmann, president of Germany’s central Bundesbank, said that an ECB bond buying policy to help Spain and Italy’s borrowing costs could violate rules on the ECB bailout of governments, and that policymakers “should not underestimate the risk that central bank financing can become addictive like a drug.”
Italian bank UniCreditis the latest bank to be investigated by U.S. regulators for possible malpractice, according to documents made public by the bank. Initial reports suggest that the bank is the latest to be probed by U.S. authorities on similar allegations leveled at the British bank Standard Chartered , which paid a $340 million fine over transactions with Iran.
There are no major earnings on Monday.