Europe Factors to Watch-Shares set to halt rally; Yellen eyed

Fri Aug 22, 2014 2:42am EDT

PARIS, Aug 22 (Reuters) - European stocks were set to inch lower in early
trading on Friday, taking a breather following a brisk two-week rally, with
investors turning cautious ahead of a speech by U.S. Federal Reserve Chair Janet
Yellen.
    At 0617 GMT, futures for Euro STOXX 50, UK's FTSE 100,
Germany's DAX and France's CAC were flat to down 0.1 percent.
    Yellen is due to speak later in the day at the annual gathering of central
bankers in Jackson Hole, Wyoming. Investors will be looking for any fresh
signals about the timing of U.S. interest rate increases. 
    Minutes from the Fed's July meeting on Wednesday showed policymakers debated
whether interest rates should be raised earlier given a surprisingly strong job
market recovery. 
    "Markets are currently pricing in the first hike for the middle of next year
but many believe that the Fed may be forced to do it sooner as the data just
keeps on improving," Craig Erlam, market analyst at Alpari, wrote in a note.
    "Yellen does not appear to be one to give in to the pressure though, as seen
in recent months by her determination to retain her very dovish tone regardless
of the improvement in the economic data."
    On Wall Street on Thursday, the S&P 500 ended at a record high after a
flurry of positive economic data, including existing home sales jumping to a
10-month high and initial jobless claims dropping sharply.
    European stocks have rallied in the past two weeks, helped in part by easing
worries over the crisis in Ukraine. The FTSEurofirst 300 index of top
European shares has risen 2.3 percent so far this week, set to record its
biggest weekly gain in six months.
    The index, which has gained 4.5 percent since a low hit two weeks ago, is
still down 3.2 percent from a 5-1/2 year high hit in June.
    
    Europe bourses in 2014: (link.reuters.com/pad95v)
    Asset performance in 2014: (link.reuters.com/rav46v)
------------------------------------------------------------------------------
  MARKET SNAPSHOT AT 0640 GMT: 
                                         LAST   PCT CHG  NET CHG
 S&P 500                             1,992.37    0.29 %     5.86
 NIKKEI                              15539.19    -0.3 %   -47.01
 MSCI ASIA EX-JP                       513.34    0.59 %        3
 EUR/USD                               1.3294     0.1 %   0.0013
 USD/JPY                               103.70   -0.12 %  -0.1200
 10-YR US TSY YLD                       2.402        --    -0.01
 10-YR BUND YLD                         0.991        --    -0.01
 SPOT GOLD                          $1,279.74    0.22 %    $2.75
 US CRUDE                              $93.97    0.01 %     0.01
 
  > GLOBAL MARKETS-ASIAN SHARES HITCH A RIDE ON WALL STREET'S RECORD 
  > US STOCKS-S&P 500 SETS RECORD CLOSE ON SIGNS OF HEALTHIER ECONOMY 
  > NIKKEI RISES FOR 10TH DAY ON STRONG U.S. SHARES, DATA 
  > FOREX-DOLLAR RALLY PAUSES AS JACKSON HOLE TAKES CENTRE STAGE 
  > GOLD NEAR 2-MONTH LOW; SET FOR WEEKLY DROP ON INTEREST RATE FEARS 
  > METALS-LONDON COPPER EYES BIGGEST WEEKLY RISE IN SEVEN WEEKS 
  > BRENT BELOW $103, HEADS FOR 2ND WEEKLY LOSS AS OIL GLUT PERSISTS 
    
    COMPANY NEWS:
    
    LONDON STOCK EXCHANGE GROUP 
    LSE said it would raise 938 million pounds ($1.6 billion) to part fund the
acquisition of Frank Russell Company. It also said its revenue increased 20
percent overall and 12 percent on an organic and constant currency basis.
 
    
    RWE 
    Germany's economy ministry will give the green light for the sale of utility
RWE's oil and gas unit DEA to an investor group led by Russian tycoon Mikhail
Fridman, despite tensions between Russia and the West over the Ukraine crisis,
two people familiar with the matter said. 
    
    DEUTSCHE BANK 
    Deutsche Bank has sold its North American natural gas trading book to Morgan
Stanley, a source familiar with the deal told Reuters. 
    
    THYSSENKRUPP 
    The chief executive of Schmolz + Bickenbach, Clemens Iller, told
Swiss paper Finanz und Wirtschaft that the company was not interested in buying
ThyssenKrupp's VDM unit. 
    
    RSA INSURANCE GROUP 
    RSA said it had reached an agreement to sell its insurance business in
Singapore and Hong Kong to Allied World Assurance Co Ltd for 130
million pounds ($215.51 million) in cash. 
    
    HOEGH LNG 
    Shipping firm Hoegh LNG reported smaller-than-expected second-quarter losses
but warned that its market will remain challenging over the next two years, even
as the growing global LNG supply will require more vessels over the longer term.
 
    
    UCB 
    The U.S. government is tightening restrictions on hydrocodone, an opioid
painkiller contained in Vicodin and other addictive drugs. The move comes as
health and law enforcement officials try to curb a rising tide of prescription
drug abuse. Nearly three out of four prescription drug overdoses are caused by
opioid painkillers, according to federal data. 
    
    SOFTWARE AG 
    The business software developer said it had hired SAP executive
Eric Duffaut to become chief customer officer and executive board member.
 
    
    PETROFAC 
    The Chairman of British oil and gas service group Petrofac, Norman Murray,
has resigned with immediate effect due to compassionate reasons, the company
said on Friday.   
    

 (Reporting by Blaise Robinson; Editing by Atul Prakash)
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A tourist takes a plunge as she swims at Ngapali Beach, a popular tourist site, in the Thandwe township of the Rakhine state, October 6, 2013. Picture taken October 6, 2013. REUTERS/Soe Zeya Tun (MYANMAR - Tags: SOCIETY) - RTR3FOI0

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