- US debt ceiling looms
- UK unemployment rate unchanged, jobless claims fall
- Eurozone inflation holds steady
FTSE 100: -0.61%
CAC 40: -0.90%
FTSE MIB: 0.55%
IBEX 35: -0.24%
Stoxx 600: -0.54%
European equities were little changed on expectations that the US government will reach a deal on the debt ceiling at the 11th hour.
The US is a day away from reaching its $16.7trn borrowing limiting and starting to run out of cash to pay its bills.
House of Representatives Speaker John Boehner yesterday proposed extending the government's funding through December 15th rather than January 15th as the Senate plans.
Fitch Ratings said the US was heading for a possible downgrade from its AAA credit rating, citing the stalemate in Washington.
"If lawmakers are unable to find common ground and reach a deal today, expect Fitch to take action on downgrading the rating followed by Moody's and S&P," said Ishaq Siddiqi, Market Strategist at ETX Capital.
The government must also tackle the federal budget. It has been in partial shutdown since October 1st after missing the deadline to hammer down a budget deal.
Siddiqi said the shutdown has hurt economic growth including consumer and business confidence and the labour market.
UK jobs data, Eurozone CPI
The UK unemployment rate held steady in the three months to August at 7.7%, as expected, the Office for National Statistics said.
The Bank of England has vowed to maintain interest rates at the current low of 0.5% until the unemployment rate falls below 7%, which is not expected for another three years.
However, jobless claims fell by 41,700 in September, the most in 16 years and beating expectations for a drop of 25,000.
August was revised to show a decline of 41,600, compared to an initially reported fall of 32,600.
Eurozone inflation remained unchanged at 1.1% in September, as predicted - its lowest in three-and-a-half years, The European Union's statistics office Eurostat revealed.
Louis Vuitton Moet Hennessy's shares
slumped after reporting a slowdown in third quarter sales growth.
IMI rallied after the British manufacturing company agreed to sell its Beverage Dispense and Merchandising divisions to Marmon Group.
Danone declined after lowering its full-year targets as the fall-out from a recall of baby-milk products in Asia had a bigger impact than expected.
Video game developer Ubisoft retreated after reducing its full-year sales expectations due to the delay of The Crew and Watch Dogs, two of its next generation titles.
Publicis tumbled after the French ad group reported easing of third quarter sales growth because of a temporary slowdown in China, economic difficulties that hurt investment in India and underperformance in Russia.
Euro/dollar edges higher
The euro rose 0.16% to $1.3546
Brent crude futures were down $0.73 to $109.880.