By Sagarika Jaisinghani
(Reuters) – European shares retreated on Monday after striking a record closing high in the previous session, as investors paused before launching into a week packed with economic data and the European Central Bank’s first policy meeting of the year.
The pan-European STOXX 600 index <.STOXX> was down about 0.3%, after gaining nearly 1% on Friday on optimism around U.S.-EU trade talks to address long-standing issues such as a French digital tax and aircraft subsidies.
Market activity was thin on Monday on account of the Martin Luther King Jr. holiday in the United States, with Asian shares hovering near 20-month highs.
The benchmark European index has risen about 2% in January, as investors bet on faster global growth amid improving economic indicators and cooling U.S.-China trade tensions.
For the week, all eyes will be on readings of the Purchasing Manager’s Index (PMI) from the euro zone, after a recent Reuters poll showed economists expected a slowdown in the bloc to have bottomed out in 2019.
“Markets increasingly think that we have seen the bottom regarding the industry so if the PMIs would surprise on the downside, that would be a risk to market sentiment,” said Teeuwe Mevissen, senior market economist at Rabobank.
Traders will also look to comments from ECB Chief Christine Lagarde on inflation and economic growth in 2020 at the central bank’s first policy meeting for the year on Thursday, where the bank is expected to keep the deposit rate unchanged after cutting it in September for the first time since 2016.
“The ECB rendezvous will likely be the most interesting one as the new president launches the central bank’s second strategic review in the euro’s two decade history,” said Hussein Sayed, chief market strategist at FXTM.
Among individual movers, German genetic testing company Qiagen
British shopping center operator Intu Properties
Premium tonic water maker Fevertree Drinks Plc
(Reporting by Sagarika Jaisinghani in Bengaluru, additional reporting by Shreyashi Sanyal; Editing by Anil D’Silva)