- German Q4 GDP confirmed
- European Commission to release economic forecasts
- Italy's Renzi wins confidence vote
- China central bank drains more funds
- US consumer confidence report out later
FTSE 100: -0.51%
CAC 40: -0.47%
FTSE MIB: -0.33%
IBEX 35: -0.21%
Stoxx 600: -0.33%
European stocks dropped following the release of German economic growth data and ahead of a US consumer confidence report.
The Federal Statistics Office today confirmed an earlier flash estimate which revealed German gross domestic product (GDP) increased by a modest 0.4% on the quarter between October and December compared with 0.3% during the previous three months.
Foreign trade drove growth in Europe's largest economy in the fourth quarter while domestic demand dragged.
At 10:00 GMT the European Commission will release its winter economic forecast for the euro-area. In the autumn it expected GDP growth to be 1.1% in 2014 and 1.7% in 2015, while inflation was projected to 1.5% in 2014 before falling to 1.4% in 2015.
The report comes after European Central Bank (ECB) President Mario Draghi hinted that he may ease monetary policy at the March meeting next week following the release of more comprehensive data, including the Bank's own economic forecasts.
"The forecasts released today could give us some insight into what the ECBs own forecasts will be, which will only assist us in predicting exactly what the ECB will do," according to Craig Erlam, Market Analyst at Alpari.
"At this stage, I don't see the ECB doing anything rash and I can't imagine these forecasts changing that, but as with all central banks in recent years, the ECB can be unpredictable so it shouldn't be written off."
China slump, US consumer confidence
Chinese stocks declined as the People's Bank of China sold 100bn yuan of 14-day repurchase agreements at 3.8% today, according to a statement posted on its website. The monetary authority withdrew a net 108bn yuan last week via two separate repo auctions, the first time it has used such agreements since June.
The central bank is draining funds from the financial system as lower money market rates signal abundant supplies of yuan amid government efforts to clean up risky lending practices.
Later on, the US consumer confidence reading for February will be unveiled and is expected to fall slightly to 80 from 80.7 the prior month.
Italy's youngest ever Prime Minister, Matteo Renzi, won a vote of confidence in the upper house of parliament yesterday, paving the way for much needed economic reforms. Another confidence vote will be held in the lower house, or chamber of deputies, today. However, unlike in the senate, the Renzi's centre-left Democratic party (PD) enjoys a clear majority.
In Ukraine, lawmakers today will vote on a national unity government so the troubled nation can receive economic aid to prevent a default. The temporary government in Kiev said it needs $35bn financial assistance. The vote comes amid violence and instability in Ukraine.
Vivendi declined after the French media and telecoms business reported 2013 results that fell short of analysts' expectations.
Aixtron edged lower as the German maker of equipment for semiconductors reported fourth-quarter sales below forecasts.
Fresenius Medical Care slid as the world's biggest provider of kidney dialysis posted full-year earnings that missed market forecasts.
Straumann Holding gained after the world's biggest maker of dental implants reported a increase in 2013 earnings and said it expects revenue will rise in a low-single-digit range in 2014.
The euro rose 0.12% to $1.3752.
Brent crude futures dropped $0.381 to $110.220 per barrel, according to data from the ICE.