European stocks are expected to open modestly higher Monday ahead one of the more active weeks for policy and politics in the region’s economy this year as investors test the strength of the global equity market’s all-time highs.
Britain’s FTSE 100 is slated to add 10 points at the opening bell, according to financial bookmakers IG, as investors mark stocks higher thanks to a marginally weaker pound sterling. European benchmarks are also likely to book small gains at the bell, although trading may get a boost after the full details from IHS Markit’s May PMI readings are published at 09:00 BST. Germany’s DAX index, however, and Switzerland’s SMI will be closed for the Whit Monday holiday.
The pound was marked lower 0.3% in overnight trading at 1.2864 as investors reacted to Saturday’s terrorist attack in London – the third such atrocity in as many months in the United Kingdom – that killed seven people and injured 50 more.
Investors are also on edge ahead of Thursday’s general election, with polls showing a narrowing lead for Prime Minister Theresa May even as her Conservative Party is expected to hold onto a majority in the snap vote that was called on April 18. Thursday will also see a key meeting of the European Central Bank in Frankfurt, during which President Mario Draghi will reveal new growth and inflation forecasts that could trigger a change in guidance that steers investors towards an exit from the Bank’s negative rate policy.
Overnight in Asia, the U.S. dollar crept higher after Friday’s losses that followed a much weaker-than-expected May employment report from the Bureau for Labor Statistics, which showed that 138,000 jobs were added to the economy last month and made significant revisions to the April tally, taking it to 174,000 from 211,000.