European markets were sporadic on Tuesday as investors mull over the possibility of the European Central Bank introducing monetary easy, which is expected to occur this week. The FTSE 100 had a sporadic day, falling dramatically in the early morning trading before ending up 0.66% on the day.
Investors are concerned that the ECB may not provide the stimulus that has been expected by investors. Data coming from Germany shows that record low unemployment levels have been hit, and bank stress levels are looking more promising than what was previously indicated.
Bond yields in Europe are up, and single currency has also rebounded. Investors are expecting the ECB to provide stimulus on Thursday at the bank’s meeting, and the markets have already adjusted their pricing for a deposit rate cut. Many analysts suggest that it would be difficult for Mario Draghi, ECB president, to not deliver a stimulus package as already predicted.
Germany’s DAX closed down 1% on the day, while France’s CAC 40 ended the day down 0.86%. The FTSEurofirst 300 started the day up before ending down 0.35%.
Positive data out of China caused Asian markets to rally 1.8% on the day, but did not have an effect on European stocks.
Germany showed positivity on Tuesday, with unemployment levels being the lowest since 1990 according to new reports.