By Peter Nurse
Investing.com - European stock markets largely weakened Friday, weighed by European Central Bank chief economist Philip Lane cautioning over the region’s recovery.
At 4:05 AM ET (0805 GMT), the DAX in Germany traded 0.2% lower, the CAC 40 in France dropped 0.1% and the U.K.'s FTSE index was up 0.1%.
Writing in a blog post a day after the European Central Bank left its policy unchanged and lifted its forecasts on growth and inflation, Lane warned that the deflationary impact of the Covid-inspired recession has not been banished.
"Inflation remains far below the aim and there has been only partial progress in combating the negative impact of the pandemic on projected inflation dynamics," Lane said in a blog post.
"It should be abundantly clear that there is no room for complacency.”
Nordea still expects the ECB to add further stimulus at the December meeting. “The economic recovery is far from guaranteed, inflation and inflation expectations will rise slowly and the ECB may need to do more to secure easy financial conditions,” analysts at the Scandanavian bank said, in a research note.
At the same time, relations between the European Union and Britain are souring, with the United Kingdom planning on drafting a law to break the divorce treaty between the two bodies, a move that would probably sink four years of Brexit talks.
Data Friday showed Britain's economy expanded by 6.6% in July from June, roughly as expected, for its third month of growth as the country recovers from its coronavirus lockdown crash.
In corporate news, Rio Tinto (NYSE:RIO) stock rose 0.3% after announcing that chief executive Jean-Sébastien Jacques, who has led the mining giant since 2016, will step down after the company destroyed an Aboriginal heritage site in Australia while developing a new mine.
Swiss frozen baked goods maker Aryzta (SIX:ARYN) jumped 11% after it said it was in advanced talks with private equity firm Elliott Advisors over a takeover deal. French telecoms company Altice NV (AS:ATCA) surged 26% as its founder Patrick Drahi moved to take it private after an alarming stock slump this year.
Oil prices weakened Friday, hit by a surprise rise in U.S. crude inventories which raises concerns about faltering demand from the commodity’s biggest consumer.
The U.S. Energy Information Administration reported late Thursday a build of 2 millions in crude inventories for last week against expectations of a 1.335 million-barrel draw. EIA's figures follow the American Petroleum Institute's report earlier in the week of a 2.970 million-barrel build.
U.S. crude futures traded 0.1% lower at $37.27 a barrel, while the international benchmark Brent contract fell 0.3% to $39.96. Both major benchmarks are down around 6.5% for the week and headed for a second week of declines.
Elsewhere, gold futures fell 0.7% to $1,951.15/oz, while EUR/USD traded 0.3% higher at 1.1845.