European stocks traded lower Monday as the U.S. dollar strengthened after hawkish comments from U.S. Federal Reserve Chair Janet Yellen in a closely watched speech Friday.
The pan-European STOXX 600 was down 0.59 percent. London’s FTSE 100 is closed for a public holiday.
Yellen said the case for a rate hike had “strengthened in recent months” pointing towards the “solid performance” of the labor market and positive outlook on economic activity, at a speech at the annual Jackson Hole gathering of central bankers on Friday.
The Fed’s Vice Chairman, Stanley Fischer, backed up Yellen’s view in an interview with CNBC. Asked whether there could be a rate hike next month and more than one this year, Fischer said that Yellen’s comments were “consistent with answering yes to both” of the questions.
Asian markets were broadly lower with the negative spilling into Europe. The stronger dollar, which was bolstered by Yellen’s comments, also weighed on oil prices and is likely to dampen investor sentiment in Europe.
Stocks to watch
In individual stock news, shares of France’s Alstom rallied after the engineering firm was awarded a $2 billion contract by Amtrak to supply new high-speed trains.
Roche shares reacted positively after the Swiss pharmaceutical giant said it received emergency use authorization for its Zika virus test by the U.S. Food and Drug Administration (FDA).
Norwegian oil major Statoil announced plans to cut costs at its Sverdrup oil field while raising output. Shares in the firm were higher.
And the Financial Times reported that Poland’s PZU is confident about reaching a deal to buy UniCredit’s Pekao bank by the end of October, sending shares in the Italian lender higher.