- Manufacturing PMIs fall in Germany, France and China
- Fed minutes indicate further stimulus cuts
- Eurozone consumer confidence report to be released
- US inflation data out later
FTSE 100: -0.56%
CAC 40: -0.80%
FTSE MIB: -1.10%
IBEX 35: -0.78%
Stoxx 600: -0.78%
European stocks declined as reports showed manufacturing activity in Germany, France and China fell unexpectedly in February.
The German manufacturing purchasing managers' index (PMI) dropped to 54.7 this month from 56.5 the previous month. It fell short of the 56.3 forecast but was above the 50 level that signals expansion.
French manufacturing PMI fell to 48.5 in February from 49.3 in January, compared to analysts' estimates of 49.5.
Chinese manufacturing PMI declined to 48.3 in February, from the prior month's 49.5. Economists had pencilled in a reading of 49.5.
The weak reports are likely to fuel concerns over the recovery of the Eurozone's two biggest economies and fears of a slowdown in the world's second largest economy.
In today's news, a report on Eurozone consumer confidence will be unveiled at 15:00. The sentiment index is tipped to rise to -11 in February from -11.7 in January.
Fed minutes signal further tapering
The Federal Open Market Committee's (FOMC) minutes of its January 28-29th meeting showed that policymakers chose to shrug off recent weak weather-affected economic data to continue scaling back stimulus last month.
"Only if the weaker data continued into the spring, when it would be harder to blame the weather, would we expect the FOMC to consider putting the taper on hold," said Paul Ashworth, Chief US Economist at Capital Economics.
The Fed last month reduced its monthly asset purchases by $10bn to $65bn.
The minutes also showed that some on the committee suggested that the Fed could raise interest rates by the second half of this year, sooner than analysts currently expect.
Sentiment was also dampened by the International Monetary Fund which warned of financial problems arising in emerging markets. The organisation said economies where inflation is still high, or where policy credibility has come into question, "need to continue tightening monetary policy in the context of strengthened policy frameworks".
Turning to today's agenda, US inflation data will be the prime focus ahead of the Fed's March policy meeting.
US consumer prices are expected to have risen by 1.6% year-on-year in January, up from 1.5% a month earlier. On the month, they are tipped to fall to 0.1% growth from 0.3%.
Other notable releases in the US will be confidence data, continuing claims, initial jobless claims and Markit's preliminary reading for manufacturing PMI.
BAE Systems falls on profit warning
BAE Systems tumbled after warning that profits in 2014 could fall by up to 10% on the back of pressures on US government spending.
Air France-KLM declined despite posting earnings that beat analysts' estimates.
Swiss Re AG gained after the world's second biggest reinsurer raised its proposed payout to shareholders for 2013 as fourth-quarter profit exceeded forecasts.
The euro fell 0.20% to $1.3705.
Brent crude futures dipped $0.455 to $109.970 per barrel, according to data from the ICE.