By Carla Mozee, MarketWatch
What strategists are saying: “Even with the higher economic growth that the ECB are forecasting, inflation still won’t reach the 2% target by 2020. This higher economic growth isn’t translating into increased inflation as quickly as the market wants,” said Fiona Cincotta, senior market analyst, at City Index, in a note.
“As a result, the euro dropped sharply lower versus the dollar, breaking through $1.18. With few catalysts now until the end of the week, the euro could break through support at $1.1765 before dropping to $1.1740.”
Brexit in Brussels: Brexit was a major focus after U.K. Prime Minister Theresa May’s government late Wednesday was defeated in a key parliamentary vote on legislation for the U.K. divorce from the EU.
The setback for the government came just as EU leaders—including May—were meeting in Brussels through Friday for a summit where Brexit will be high on the agenda. The group is expected to give the green light for divorce talks to move onto the second phase.
The U.K.’s lower house voted to amend the Brexit bill to give members of parliament the power to reject the final divorce deal struck with Brussels. The government had warned that the measure could jeopardize a smooth exit from the EU in March 2019.
The vote—which was an amendment to May’s flagship Brexit bill—came after a rebellion of 11 members of her own Conservative Party, and is seen as a potential route to a softer Brexit.
Stock movers: Capita PLC /zigman2/quotes/204738740/delayed UK:CPI -2.42% tumbled 12.6% as the London-based business and outsourcing services company said its bid pipeline is currently valued at £2.5 billion, but that the bids are unlikely to add to profit in 2018 if successful.
Steinhoff International Holdings NV /zigman2/quotes/208065315/delayed DE:SNH -0.07% slid 13% after the owner of Poundland and Mattress Firm said it would restate its 2016 financial results as part of its scrutiny into its European segment’s 2017 balance sheet assets.
Sky PLC fell 1.8% after the broadcaster’s largest shareholder, 21st Century Fox Inc. /zigman2/quotes/207816609/composite FOXA -1.31% , agreed to sell most of its assets to Walt Disney Co. /zigman2/quotes/203410047/composite DIS -6.94% in a deal that valued at about $52.4 billion.
Denmark’s Vestas Wind Systems AS /zigman2/quotes/205019303/delayed DK:VWS -9.04% jumped 7.1% and Spain’s Siemens Gamesa Renewable Energy SA /zigman2/quotes/205820667/delayed ES:SGRE -14.04% gained 3.5% following reports that some Republican members of the U.S. Senate are reconsidering the potential for cuts of renewable energy tax credits.
Of the Stoxx 600, Lonmin PLC soared 20% after the platinum producer agreed to be purchased by South Africa’s Sibanye-Stillwater .
Economic data: IHS Markit said its December flash composite purchasing managers index for the eurozone came in at 58.0, the highest since February 2011, led by continued improvement in France. The manufacturing PMI rose to a record of 60.6.
Black Friday events helped push U.K. retail sales up by 1.1% in November, well above the 0.4% increase expected in a FactSet survey of analysts.