Europe Economy

Europe Shares Seen Lower; Focus Shifts to US

European stocks were expected to open lower on Monday after Asian shares dropped overnight following a close to 10 percent rally last week on news that the euro zone will implement a number of measures to resolve its sovereign debt crisis.

Jan Mammey | Stock4B | Getty Images

The FTSE is called 45 points lower, the DAX in Frankfurt is expected to open down by 62 points and the CAC 40 is called lower by 28 points.

Focus will shift to the US this week as investors await the outcome of the Federal Reserve's monetary policy meeting and the latest U.S. non-farm payrolls data, which is due on Friday.  

The euro held on to most of last week's gains against the dollar overnight, but the U.S. currency fell to a record low against the yen, reaching 75.31 before the Japanese intervened in currency markets to weaken the yen.  Following the intervention, the dollar rose by 4.5 percent against the yen to 79.17.

Eurogroup chairman Jean Claude Juncker said on Sunday that no concessions would be offered to the Chinese in return for investment in Europe. Juncker said it "makes sense" for China to invest its "improbably large surplus" in Europe in an interview with German radio station ARD.

However, Chinese state news agency Xinhua reported on Sunday that the European Union should not expect China to be its "savior" or provide a "cure" for the debt crisis in the region, and that European policymakers and nations needed to make "more concerted efforts" to resolve the crisis.

The FT reported on Monday that German Finance Minister Wolfgang Schauble supports "big steps" to move towards a "fiscal union" within the European Union. This includes a "commonly agreed finance policy" and taking the lead in introducing a financial transaction tax,  increasing the likelihood that the rest of the world will follow suit, Schauble says in an interview.

Also in the FT, British Prime Minister David Cameron wrote that policymakers should avoid talking down the global economy and he will warn against insular policy decisions at the G20 summit later this week.  Cameron adds that the current economic malaise can be resolved if nations confront debt, enhance competitiveness and establish new global trade links.

The OECD will publish its latest analysis of the G20 economies on Monday ahead of a summit of G20 leaders in Cannes on Thursday.  The briefing will be presented by OECD head Angel Gurria from 10:00 London time.

The United Nations will host 'The Day of 7 Billion' on Monday with a series of events marking the global population reaching 7 billion.

The outgoing president of the European Central Bank, Jean Claude Trichet steps down Monday to be replaced by Italian Mario Draghi.  Trichet defended the central bank's record under his leadership in an interview with CNBC that will air throughout the day on Monday.  Trichet added that individual governments had made mistakes during the financial crisis, but the central bank had shown strong judgment and "experience has proved that our diagnosis was right."

UK bank Barclays saw its pre tax profit rise above £5 billion ($7.9 billion) on Monday as third quarter pretax profit hit £2.4 billion ($3.8 billion).  The bank said it is confident it will exceed the £1 billion ($1.59 billion) savings target it set earlier this year, but Barclays Capital income excluding its own credit was down 22 percent in the third quarter.

Swiss chemicals firm Clariant posted a third quarter net income of 81 million Swiss francs ($92.9 million) on Monday and confirmed its guidance for full-year sales between 7.0 billion Swiss francs ($8.9 billion) and 7.2 billion.

Economic releases to watch out for include mortgage lending rates from the UK at 9:30 and EU unemployment data 10:00.

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