European Shares Drop as Investors Await for Brexit, Fed, Trade
(Bloomberg) -- European shares fell at the open as investors await a crucial Brexit vote, another Federal Reserve meeting and a new round of trade talks this week. With only four trading days to go, January is set to be the best month for European shares since December 2016.
The Stoxx Europe 600 index dropped 0.4 percent, with almost all the sub groups in the red and basic resources shares jumping the most. MorphoSys AG fell 8 percent as a U.S. court declared some patents invalid.
“Monday and Tuesday should be transition days before new Brexit votes in the British Parliament and especially ahead of the Fed,” said Diego Fernandez, chief investment officer at A&G Banca Privada in Madrid. “The deceleration is already clear, the question is when will central banks acknowledge it and stop rates hike.”
Federal Reserve Chairman Jerome Powell will hold a news conference Wednesday and is expected to keep rates unchanged.
Trade talks will also gain investors’ attention this week as Chinese President Xi Jinping’s top economic aide, Vice Premier Liu He, meets with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin in Washington on Wednesday and Thursday. The interpretation of the results may not be straightforward.
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