European stocks higher, continue positive momentum
written by Bella Palmer
European stocks closed mixed on Monday as forthcoming U.S. and U.K. inflation data dominated investor attention
European stocks were up Tuesday, continuing to show cautiously positive momentum after last week’s volatility.
The Stoxx 600 index, the regional benchmark, was up 0.08% at 8:49?am GMT. Utilities led gains, up 0.57%, while travel stocks slid 1.26%.
European stocks closed mixed on Monday as forthcoming U.S. and U.K. inflation data dominated investor attention.
U.K. wage data released by the ONS on Tuesday showed that pay excluding bonuses rose 5.4% year-on-year between April and June — the lowest rate in two years.
The unemployment rate fell to 4.2% from 4.4%, the ONS also said.
Jack Kennedy, senior economist at jobs site Indeed, said the figures showed the labour market remained “fairly tight” and that wage pressures were softening only gradually, potentially limiting the level of monetary easing the BoE is able to deliver this year.
U.K. inflation data, due on Wednesday, will be the first figure since the Bank of England reduced interest rates by 25 bps.
Money markets are currently pricing in a high probability of further rate cuts amounting to 50 bps this year. The BoE’s key rate currently stands at 5%.
The British pound was higher following the labour market data, trading up 0.28% against the U.S. dollar at $1.280 and 0.3% higher against the euro at 1.1722.
Investors around the world will also be analysing the latest U.S. inflation data this week, in order to get a better picture of the state of health of the country’s economy.
The U.S. producer price index (PPI), a measure of wholesale prices, is published on Tuesday and the consumer price index (CPI) for July will be released Wednesday, with investors evaluating whether the data could prompt the U.S. Fed to begin lowering rates in September.
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