European Stocks Range Bound On Stimulus Uncertainty

The French CAC 40 index was marginally up 0.02 percent or 0.59 point to 3379.70. Shares of Total SA advanced 0.43 percent and shares of Carrefour SA rose 0.42 percent.

London’s FTSE 100 index dropped 0.15 percent or 8.56 points to 5710.89. Shares of Whitbread PLC fell 0.75 percent and shares of Barclays PLC declined 0.74 percent.

The German DAX 30 index fell 0.06 percent or 4.08 points to 6891.41. Shares of SAP AG dropped 0.49 percent and shares of Volkswagen AG declined 0.22 percent.

Spain's IBEX 35 was marginally down 0.05 percent or 3.40 points to 7191.60. Shares of Repsol SA dropped 0.87 percent and shares of Acciona SA declined 0.95 percent.

Market players will be disappointed if the ECB decides that bond purchases will be limited and that they will not begin until after the European Financial Stabilization Mechanism (EFSM) or the European Stability Mechanism (ESM) have bought bonds themselves. Investors expect that with more countries in the euro zone moving into recession, the Bank might adopt further measures to support the broader economy.

At the same time, it is likely that the central bank will reiterate that governments must apply to the EFSF for support and accept the conditions set out by the EFSF before the ECB buys the bonds. ECB President Mario Draghi’s pledge to do “whatever it takes” to save the euro ahead of last month’s policy meeting had put a stop to the alarming rise in Spanish and Italian bond yields.

“Now, he needs to unveil the plans that he promised last month would be ironed out in the weeks ahead. By pulling out of the Jackson Hole Economic Symposium due to a heavy workload, the President and other Executive Board members have prompted speculation that the Bank has been unable to reach an agreement,” Capital Economics said in a note.