European markets muted as focus turns to U.S. inflation, Fed outlook
The pan-European Stoxx 600 slipped fractionally below the flatline in early trade, with basic resources shedding 0.7% to lead losses as most sectors and major bourses showed minimal movement. Media stocks added 0.4%.
Investors are trying to assess the potential pace of the U.S. Federal Reserve’s monetary policy tightening efforts. A surprisingly strong U.S. jobs report last week seemed to reduce the likelihood of a recession, allowing the central bank the capacity for more aggressive rate hikes as it looks to rein in inflation.
Wednesday’s July consumer price index is expected to offer some clarity on the path of interest rate hikes.
Shares in Asia-Pacific were mixed on Tuesday as markets continued to digest last week’s stellar payrolls report and assess the trajectory of monetary policy, with Japan’s Nikkei 225 the weakest performer in the region.
U.S. stock futures rose slightly in early premarket trade on Tuesday as Wall Street reacted to some significant earnings report, in particular weaker-than-expected revenue from Nvidia and several chipmakers.
Earnings also remain a key driver of individual share price movement in Europe, with Abrdn, IHG, L&G, Continental and Munich Re among those reporting before the bell on Tuesday.
Swiss travel retailer Dufry gained 3.2% in early trade to lead the Stoxx 600, while workspace company IWG plunged 13% to the bottom of the index after their respective first-half earnings.
On the data front, U.K. retail sales rose 1.6% in July, buoyed by a heatwave and sales of hot-weather clothing, picnic items and electric fans, according to a report from the British Retail Consortium.
