The European markets ended Friday’s session with modest losses. After a weak start, the market settled into a sideways trend and remained in negative territory throughout the session. While crude oil prices have steadied since Thursday, energy stocks have remained under pressure.
Investors were also disappointed after the euro area private sector grew at the slowest pace in five months in June. Traders were also keeping a close eye on developments at the EU Summit in Brussels.
The European Central Bank has sought more supervisory powers over the clearing activities, in a bid to secure control of the London-based euro clearing post-Brexit.
The Governing Council, led by ECB President Mario Draghi, has recommended an amendment to Article 22 of the Statute of the European System of Central Banks and of the European Central Bank, the bank announced on Friday.
The amendment would provide the ECB with a clear legal competence in the area of central clearing, which would pave the way for the Eurosystem to exercise the powers that are foreseen for central banks issuing a currency.
Clearing activity has gained more significance during Brexit talks with the UK keen to retain the business in London. Meanwhile, European cities such as Frankfurt are eager to attract the firms who may leave Britain after Brexit.
The UK economy appears to “overstimulated” and the monetary policy has been set too loosely, the monetary policy committee member of the Bank of England Kristin Forbes said Thursday.
This is not an economy that is too weak to support an increase in interest rates, she said at the London Business School. The UK is clearly outperforming or close to equilibrium by every measure except wage growth.
Given that UK inflation is now likely to reach 3 percent, and is forecast to remain above 2 percent for at least three years, this suggests “some urgency” to hike rates, she said.
The pan-European Stoxx Europe 600 index weakened by 0.19 percent. The Euro Stoxx 50 index of eurozone…