Europe open: Lower start despite very strong euro area PMIs for March

The main stockmarket gauges moved lower in early trading despite very strong readings on the euro area's manufacturing and services sectors and relatively 'dovish' remarks from the European Central Bank's chief economist.

As of 0854 GMT the benchmark Stoxx 600 was drifting lower by 0.24% to 376.28 as German Dax slipped 0.10% to 12,027.84 with the FTSE Mibtel off by 0.24% to 20,199.70.

Speaking to Italian daily Il Sole, ECB chief economist Peter Praet reiterated the ECB would continue its bond buying programme until at least the end of 2017 and keep rates low or cut them until well beyond the end date for those purchases.

In typical risk-off fashion, the euro/dollar is nudging higher by 0.14% to 1.0798 as front month Brent crude oil futures add 0.22% to trade at $50.67 per barrel.

A gauge of activity in the Eurozone's manufacturing and services sector hit a 71-month high in March, far outpacing analysts' forecasts.

IHS Markit´s composite euro area purchasing managers' index for factory and service sector activity rose from 56.0 for February to 56.7 for March, according to a preliminary estimate.

"The increasingly broad-based nature of the upturn also bodes well for strong growth to be sustained in coming months. Perhaps the best news came from France, where growth has risen above that seen in Germany, led by strengthening domestic demand," said Chris Williamson, chief business economist at IHS Markit.

Williamson also noted the increased inflationary pressures evident in the data, in part thanks to companies' increased pricing power as demand strengthened.

Acting as a backdrop, overnight the main averages on Wall Street registered a slight fall, with traders focused on the US House of Representatives' decision to postpone a vote on repealing Obamacare, possibly until today.

"Calls for another flat European open come after last night’s US congressional vote on repeal of Obama’s Affordable Care Act (ACA) was delayed by 24hrs and US markets a shade lower. This adds to concerns that Trump lacks enough house support (even among Republicans) and that he may struggle to get approval for all the stimulus policies he pledged, said Mike Van Dulken, Director of Research at Accendo Markets.

Still on the economic calendar for Friday were figures on US durable goods orders in February at 1230 GMT, alongside speeched from the Fed speakers. The latter included Chicago Fed chief Charles Evans at 1200 GMT, St.Louis Fed president James Bullard at 1305 GMT and the New York Fed's William Dudley at 1400 GMT.

Regulators in the States gave clearance for a drug developed by Merck in conjunction with America's Pfizer to combat a rare type of skin cancer.

Deutsche Bank has taken a decision on the location of its new London base, a positive signal as regards its intentions post-Brexit.

Further mergers between lenders in Italy are inevitable, Ubi Banca chief Victor Massiah told Euromoney.