- Strong data points to Fed stimulus cut
- UK construction activity picks up
- Spain's unemployment falls
- Chinese consumer confidence rises
- ECB has leeway for more stimulus, says official
FTSE 100: -0.85%
CAC 40: -1.70%
FTSE MIB: 1.01%
IBEX 35: -1.01%
Stoxx 600: -0.95%
European stocks fell as investors weighed recent economic releases and waited for an all-important US jobs report to determine when the Federal Reserve will begin tapering stimulus.
Strong US data, including yesterday's better-than-expected manufacturing figures, has fuelled speculation that the central bank will begin scaling back its monthly $85bn bond buying programme at its mid-December meeting.
"Until recently, this had looked unlikely due to the unknown impacts of the US government shutdown on the economy and the mixed data seen in the months leading up to it, but now it looks well and truly back on the table," said Alpari analyst Craig Erlam.
"The data we've seen for September recently has been surprisingly strong. If we see similar figures from the rest of the November figures, the FOMC may be tempted to test the water with a small reduction of around $10bn."
Investors will be closely watching a non-farm payrolls report on Friday to gauge the health of the world's biggest economy that could prompt an earlier tapering than initially anticipated.
Activity in Britain´s construction sector defied market expectations for a slight slowdown in November.
The Markit/CIPS construction sector purchasing managers' index jumped to 62.6 from 59.4 in October, ahead of the consensus estimate for a reading of 59. A reading above 50 signals expansion.
In Spain, the number of people registered as unemployed fell by 2,475 last month, the first decline for the month of November since the current system was introduced in 1997.
Unemployment normally picks up in November as the tourism sector slows down after the summer.
The consensus estimate was for an increase of 50,000 people.
Meanwhile, Market News International´s (MNI) Chinese Consumer Indicator rose for the fourth consecutive month in November, led by increased optimism about future economic growth prospects, following the recent pick-up in economic activity.
The Consumer Indicator rose to 96.6 in November from 95.7 in October, its highest level since June.
ECB could change rates, says Viñals
José Viñals, former European Central Bank (ECB) member and current Financial Counsellor and Director of the Monetary and Capital Markets Department at the International Monetary Fund (IMF), said that sluggish growth and low inflation in the Eurozone gives the ECB elbow room to take further monetary policy action.
"In my opinion, the ECB could change rates even further in order to accelerate the European economic recovery," the former Eurozone monetary policymaker said in an interview published on Monday in the Polish newspaper Rzeczpospolita.
He noted that the economic situation gave the central bank leeway to pursue more stimulus.
"Inflation is low, significantly below 2%, and the economy needs cheap money in order to recover. The recovery is very slow and unemployment remains at a dangerously high level," he explained.
After cutting rates to a record low of 0.25% last month, the ECB's next monetary policy decision will be announced on Thursday. The consensus does not expect there to be another rate change after November's surprise cut.
Miners including Antofagasta, Fresnillo and Randgold edged lower after the price of commodities dropped again today following a sell-off yesterday.
ThyssenKrupp declined after raising €882.3m through a share sale.
Sonova slumped after Morgan Stanley downgraded the stock to 'equal weight' from 'overweight'.
The euro rose 0.22% to $1.3572.
Brent crude futures fell $0.045 to $111.400 per barrel, ICE data showed.