Frankfurt - Stocks in Europe declined for a second day as investors awaited US data and this week’s European Central Bank meeting for indications of the direction of monetary policy.
The Stoxx Europe 600 Index lost 0.7% at in London. The gauge yesterday snapped its longest winning streak in almost seven weeks as banks slid.
US data on manufacturing today and a key payroll report due on Friday will be parsed for clues as to whether the world’s biggest economy can withstand a potential rate increase next month, while the ECB announces its rate decision on Thursday, followed by a press conference by President Mario Draghi.
Traders are pricing in a 24% chance of a Federal Reserve interest rate hike in June, and July is the first month with at least even odds of higher borrowing costs.
European shares had regained momentum last week after falling as much as 5.4% from an April 20 high, posting their biggest advance since February. The Stoxx 600 added 1.8% in May, its best monthly gain since November.
Switzerland’s benchmark SMI Index retreated 0.4% today as a report showed the economy barely grew in the first quarter as government spending fell for the first time in a year.
Among stocks moving on corporate news, Royal Ahold rose 1.7% after the Dutch grocery chain that’s merging with Delhaize Group reported first-quarter profit that topped analysts’ predictions.
Elekta AB fell 1.5% after the Swedish maker of medical devices posted disappointing fourth-quarter revenue and profit, and forecast weak results for the first half of the year.