European stock markets experienced a mixed session on Tuesday, with investors cautiously navigating corporate earnings announcements in anticipation of the upcoming US inflation reports.
As of 03:15 ET (07:15 GMT), Germany’s DAX index traded 0.1% lower, while France’s CAC 40 slipped by the same margin. Conversely, the UK’s FTSE 100 index saw a modest gain of 0.1%.
Market Consolidation Ahead of US Inflation Data
European markets found themselves in a consolidation phase near record highs, with both the UK’s FTSE 100 and Europe’s STOXX 600 index reaching all-time peaks just days earlier.
Trading activity remained subdued on Tuesday, with European indices expected to remain within narrow ranges as traders exercised caution ahead of key inflation data releases from the US. The April producer price index is scheduled for release later in the session, followed by the consumer price index on Wednesday. Investors are closely monitoring these reports for any signs of easing inflationary pressures, which could impact the Federal Reserve’s monetary policy decisions.
German Inflation Remains Stable, UK Faces Wage-Driven Inflation Concerns
Inflation data from Germany revealed a stable picture, with the April annual figure holding steady at 2.2%, indicating that inflationary pressures are under control in the Eurozone’s largest economy.
However, the UK witnessed less encouraging economic indicators, as average earnings, excluding bonuses, remained stagnant at 6.0% in March. This suggests that wage-driven inflation could pose challenges for the Bank of England as it evaluates the possibility of interest rate cuts. Additionally, UK unemployment rose to 4.3% in the three months to March, up slightly from the previous period.
Corporate Highlights and Market Movements
In corporate news, Bayer stock rose over 2% after reporting a 1.3% decline in adjusted earnings for the first quarter, surpassing analysts’ expectations.
Vodafone stock saw marginal gains despite a 75% drop in operating profit for the 12 months ending March, as the telecom giant adjusted its European presence through divestments and mergers.
Meanwhile, BHP Group shares declined by 0.5% following Anglo American’s rejection of its takeover offer. BHP is expected to revise its proposal for Anglo American, which rejected the initial bid citing undervaluation.
Crude Prices Retreat Amidst Canadian Wildfires
Crude oil prices dipped slightly on Tuesday, reversing some of the gains from the previous session, as wildfires in Canada raised concerns about potential disruptions in the country’s oil supply.
US crude futures traded 0.1% lower at $79.07 per barrel, while the Brent contract dropped by the same margin to $83.28 per barrel. The wildfires, which spread across Western Canada, posed risks to oil and gas supplies, particularly as they approached Fort McMurray, Alberta, a key oil hub. The city had previously suffered significant damage from wildfires in 2016, temporarily halting around 1 million barrels per day of oil production.