European shares seen lower; US data and Fed watched

European shares seen lower; US data and Fed watched

European equities are expected to open lower on Monday as markets continue to focus on comments from U.S. Federal Reserve officials.

The FTSE is called down 5 points at 6,688, the German DAX is tipped down 3 points at 9,165 and the French CAC is seen unchanged at 4,292.

With the market nervously wondering whether the Federal Reserve will start to reduce their quantitative easing program, a few critical clues could come this week.

Investors will seek to determine whether a December taper is now on the table by closely watching a speech by Fed Chairman Ben Bernanke in Washington on Tuesday night, and on Wednesday, the release of minutes from the Federal Open Market Committee’s October meeting are due.

In addition, taper-related scrutiny of the jobs market will give Thursday’s initial jobless claims data an added importance.

In Asia, Hong Kong and China equity markets climbed on Monday, leading regional gains after the mainland released details of its broad-based reform plans, with a fillip from positive cues on Wall Street Friday on dovish comments from Federal Reserve Vice Chair Janet Yellen.

China unveiled bold reform plans from its Third Plenum late on Friday, including easing the one-child policy, implementing residence registration reforms, allowing market pricing of key resources and further financial liberalization.

Investors could be watching Italy this week to see if the fragile Italian government can survive a key split within Silvio Berlusconi’s party this weekend, which is a key coalition partner. Italian Interior Minister Angelino Alfano said on Saturday that all five centre-right ministers would remain in government after a split in Silvio Berlusconi’s People of Freedom (PdL) party, and that the stability of the ruling coalition was not at risk.

There are no major data or earnings releases scheduled in Europe on Monday.

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