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European stocks steady amid caution ahead of key inflation data

Published 02/27/2024, 02:51 AM
Updated 02/27/2024, 03:09 AM
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Investing.com - European stock markets traded largely unchanged Tuesday, struggling for direction as investors wait on inflation data that could impact the course for interest rates.

At 03:05 ET (08:05 GMT), the DAX index in Germany traded 0.1% higher, the FTSE 100 in the U.K. gained 0.1%, while the CAC 40 in France fell 0.1%.

Caution ahead of key inflation data

Equities around the globe climbed to record highs in recent days, but have since paused for breath ahead of the release of a series of inflation numbers that are likely to influence thinking over future monetary policy.

The eurozone is set to release its consumer price index for February on Friday, while reports from Germany, France and Spain are due on Thursday, ahead of the main release.

Elsewhere, the U.S. Federal Reserve's favoured core measure of personal consumption expenditures is due on Thursday, and is forecast to rise 0.4% on the month in January.

Recent economic data releases have indicated that the U.S. economy remains robust, prompting investors to push back bets on rate cuts by the Federal Reserve to later in the year. 

There were mixed results on the subject overnight.

Japan's core consumer inflation slowed for a third straight month in January but beat forecasts and held at the central bank's 2% target, while inflation in U.K. retail slowed to 2.5% in February, a fall from 2.9% in January and the lowest rate since March 2022.

Data released earlier Tuesday also showed that German consumer sentiment is likely to stay fragile in March in Europe's largest economy, with the GfK forward-looking index improving slightly to -29.0 from -29.6 the prior month. 

Munich Re moves to reassure shareholders

Turning to the corporate sector, Puma (ETR:PUMG) stock rose 2.4% despite the German sportswear company saying it expects a weaker first half of 2024, as negative currency effects continue to apply pressure.

Munich Re (ETR:MUVGn) stock rose 1.5% after the reinsurance giant's profit fell in the final quarter of 2023, partly due to Hurricane Otis, but still beat market expectations. It had also announced late Monday plans to return about €3.5 billion (€1 = $1.0858) to shareholders through a new buyback program and an increased dividend. 

Standard Chartered (OTC:SCBFF) stock rose just 0.2% after Reuters reported the Asia-focused lender has suspended new offshore investments by its Chinese clients through a key regulatory program since last week.

Crude gains on supply concerns 

Oil prices edged higher Tuesday, extending the previous session’s gains, as continued disruptions to global shipping activity in the Red Sea renewed fears of tighter supplies.

By 03:05 ET, the U.S. crude futures traded 0.4% higher at $77.89 a barrel, while the Brent contract climbed 0.4% to $81.97 a barrel. 

Both oil benchmarks settled more than 1% higher on Monday after U.S.-led forces conducted new strikes on the Iran-backed Yemeni Houthis in the Red Sea, after the group continued to attack ships in the region in solidarity with Palestine over the Israel-Hamas war.

However, U.S. President Joe Biden said on Monday he hopes to have a ceasefire in the Israel-Hamas conflict in Gaza start by next Monday. 

Additionally, gold futures rose 0.3% to $2,045.25/oz, while EUR/USD traded 0.1% higher at 1.0859.

 

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