- German economic confidence report out
- UK inflation in focus
- US returns to trading
- Italy's Renzi in coalition talks
FTSE 100: -0.14%
CAC 40: -0.31%
FTSE MIB: 0.13%
IBEX 35: -0.82%
Stoxx 600: -0.29%
European stocks were mixed ahead of German investor confidence data and UK inflation figures.
The ZEW institute will release its economic sentiment survey for Germany and the Eurozone. The economic sentiment index for Germany is tipped to fall to 61.5 in February from 61.7 in January while the index for the Eurozone is expected to rise to 73.9 from 73.3.
Traders and policymakers are closely monitoring economic data to gauge the health of the bloc as speculation mounts on whether the European Central Bank (ECB) will undertake measures to tackle falling inflation.
ECB President Mario Draghi has indicated that the ECB will consider changing its current policy at its March meeting after the release of more comprehensive data.
Earlier this month he said the environment remained too uncertain to act as economic reports have yet to paint a clear picture.
In the UK the focus today will be on the release of the latest UK inflation numbers. Consumer prices are expected to have held at the Bank of England's (BoE) 2% target last month.
The return to the BoE's target for the first time since November 2009 in December was seen as supportive for the UK's recovery.
"Firstly, and most importantly, it means the BoE is under no pressure to hike interest rates and risk choking off what little recovery we're seeing," said Alpari analyst Craig Erlam.
"Secondly, it means that the gap between wage growth and inflation is narrowing, which is good because it eases the pressure on families who are struggling due to the rising cost of living."
Back in Europe, new car sales increased for a fifth consecutive month in January by 5.2% from a year earlier to 967,800 vehicles, the Brussels-based European Automobile Manufacturers Association, said today. It compared to a 13% jump in December sales.
Meanwhile, the US returns to trading after taking a break on Monday for Presidents' Day which should boost trading volumes. However, the session will be rather thin on economic data so attention will turn to the Federal Reserve's board meeting on banking supervision tonight.
In China, the government sold repurchase contracts for the first time since June after money-market rates declined and the country reported record lending figures in January. The People's Bank of China conducted 48bn yuan of 14-day repurchase contracts at a yield of 3.8%, according to a statement on the bank's website.
Italy's Renzi in coalition negotiations
Italian centre-left leader Matteo Renzi will be in coalition talks today after receiving a mandate to form a new government following the resignation of Prime Minister Enrico Letta.
Renzi, who plans a radical programme to lift Italy out of its most serious economic slump since World War Two, will need to seal a formal coalition deal with the small centre-right NCD party to secure a majority and name his cabinet.
President Giorgio Napolitano asked Renzi to form the next government after Letta caved into calls to step down following a meeting of their Democratic Party last week.
Italian 10-year yields have dropped to their lowest level since 2006 this week following the news.
EU finance ministers make progress on bank talks
European Union finance ministers met yesterday in Brussels to discuss creating a system for handling failing euro-area banks.
Minsters hailed the progress of talks as the ECB prepares to take over supervision of banks in November.
During the meeting, ministers also discussed Greece's debt. Dutch Finance Minister Jeroen Dijsselbloem said there was no need to discuss fresh aid for twice-bailed out Greece before August, with a current package enough if Athens meets conditions.
The European Union, the European Central Bank and the International Monetary Fund first bailed out Greece in 2010 with a programme worth €110bn.
BHP Billiton rallies after first half results
BHP Billiton gained after the world's biggest mining company posted first-half profit that beat analysts' forecasts.
Casino Guichard-Perrachon advanced after reporting an 18% jump in 2013 earnings.
Pandora climbed as the Danish jeweller reported fourth-quarter income that surpassed market expectations.
MTU Aero Engines was higher as the German aircraft-engine manufacturer unveiled 2013 sales ahead of analysts' estimates.
The euro rose 0.06% to $1.3715.
Brent crude futures fell $0.083 to $109.090 per barrel, according to ICE data.