LONDON - Markets were trading in narrow ranges Monday as investors awaited a raft of economic and corporate news over the coming days, including the monthly policy meeting of the European Central Bank.
For weeks, the U.S. Federal Reserve has been the central bank most investors have been monitoring as they looked for clues as to when it will start withdrawing its monetary stimulus. The $85 billion in monthly asset purchases have been one of the reasons why many stock indexes, including the main U.S. markets, have struck record highs this year.
Following the Fed's latest policy statement last week, investors now think "tapering" of the stimulus may begin as soon as December. That weighed on stock markets, which had been buoyed by expectations the Fed wouldn't act until March at the earliest, largely because of the uncertainty created by the U.S. government showdown.
On Thursday, the ECB will be in focus, with investors wondering whether surprisingly low inflation figures may prompt policymakers to cut the bank's benchmark interest rate to a record low of 0.25 percent. The prevailing view is that the ECB will keep the rate unchanged at 0.5 percent but may hint at further action if need be.
"For now, we think that the Governing Council will refrain from any immediate action, but we expect the downbeat tone of this week's meeting to lay the groundwork for a policy response over the next few months," said Adam Cole, an analyst at RBC Capital Markets.
The euro was the main mover following last week's inflation figures, which showed prices across the 17 EU countries that use the euro rising only 0.7 percent in October, well down on the ECB 's mandate of just below 2 percent. Europe's single currency has recovered its poise somewhat, and was trading 0.2 percent higher Monday at $1.3507.
In stock markets, Germany's DAX was up 0.4 percent at 9,039 while the CAC-40 in France rose 0.3 percent to 4,286. The FTSE 100 index of leading British shares was 0.4 percent higher at 6,764.
Wall Street was poised for a solid opening, with both Dow futures and the broader S&P 500 futures up 0.2 percent.
Earlier in Asia, Hong Kong's Hang Seng eased 0.3 percent to 23,189.62 and China's Shanghai Composite was flat at 2,149.63. Japan and India's stock markets were closed for public holidays. Seoul's Kospi lost 0.7 percent to 2,025.17.
The biggest mover in Asia was Thailand's benchmark, which tumbled 2.4 percent after protesters flooded the streets of the capital, Bangkok, to oppose an amnesty bill they say is designed to bring back Thaksin Shinawatra, who was ousted as premier in a 2006 coup.