European stock markets traded lower Thursday ahead of the publication of the ECB’s strategy review, handing back some of the previous session’s gains after a weak lead from Asia.
At 4:05 AM ET (0805 GMT), the DAX in Germany traded 1.4% lower, the CAC 40 in France fell 1.8% and the U.K.’s FTSE 100 dropped 1.4%.
Stock markets have generally posted strong gains this year. However, sentiment could be changing amid worries of a Chinese regulatory clampdown on tech stocks, rising Covid-19 virus cases and fretting that central banks, and the Federal Reserve in particular, could be close to tightening monetary policy.
The DAX closed 1.2% higher Wednesday, the CAC 40 gained 0.3% and the FTSE 100 ended up 0.7% after the release of the Federal Reserve’s latest policy meeting minutes.
They stated that more evidence of a robust economic recovery would be needed to set a timeline for asset tapering, but they also made clear that some FOMC members think that could come sooner than previously expected.
Sticking with central banks, the European Central Bank is set to announce the outcome of an 18-month strategy review at 1100 GMT, followed by a news conference hosted by President Christine Lagarde at 1230 GMT.
The central bank is expected to raise its inflation goal to 2%, a more explicit target than the previously used phrase, “below, but close to, 2% over the medium term”, as well as describing the target as symmetric.
The FTSE MIB climbed down by 2.06% to 24,764.71. In the cash markets, the DAX futures Germany was trading down 1.23% to 15,501.17. CAC 40 futures in France fell by 1.77% to 6,412.60 while the FTSE 100 futures in the U.K. were down by 1.35% to 7,052.97. ,at the time of writing.