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London - European stocks were little changed as investors awaited a speech by Federal Reserve Chair Janet Yellen for indications on the path of future US interest-rate increases.
The Stoxx Europe 600 Index slipped 0.1% at 10:14 a.m. in London, paring its weekly advance to 0.5%. The volume of shares changing hands was about 38% below the 30-day average ahead of a UK holiday on Monday.
The gauge has been trading in a tight range for most of the month, struggling to find a direction after a rebound of as much as 12% following the aftermath of Britain’s secession vote.
Now, all eyes are on the Fed, with traders bringing forward their expectations for a rate increase. They see a one-in-three chance of the central bank increasing borrowing costs next month, double their bets from two weeks ago, after officials made the case for policy tightening in recent days.
Yellen is scheduled to speak at the annual monetary policy symposium in Jackson Hole, Wyoming, at 10 a.m. local time.
“Definitely in focus today is the Jackson Hole meeting and Ms. Yellen’s speech,” said Michael Kapler, a portfolio manager at Mittelbrandenburgische Sparkasse in Potsdam, Germany. “Markets have been very, very quiet over the last few days.
Most market participants are a little bit uncertain about the policy of the Fed because you’ve seen that over the last couple months they’ve been talking about interest rate hikes and then stepping back.”
A gauge of volatility expectations for the region’s stocks is posting its lowest monthly average since March of last year, indicating how quiet the market has been.
The calm was interrupted on Thursday, though, as European equities fell the most in three weeks after a report showed German business confidence unexpectedly weakened to the lowest level in six months.
That renewed concerns about the efficiency of European Central Bank stimulus to spur growth amid political turmoil. The Stoxx 600 has lost 6.6% this year, with banks slumping the most, while equities in the US and Asia are up.
Italy’s FTSE MIB Index fell 0.5% on Friday, leading declines among the region’s markets as UniCredit, Banca Popolare di Milano Scarl and Banco Popolare dropped more than 2%.
Among stocks moving on corporate news, French media company Vivendi fell 5% after reporting quarterly earnings that missed analyst estimates.
Hennes & Mauritz slid 2.2% after HSBC Holdings lowered its rating on the retail to a hold, citing a lack of catalysts.
Gemalto jumped 6.7% after the software firm posted an increase in net profit and confirmed its gross margin forecast for the year.
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