European markets muted as caution reigns after Fed minutes

Soegeefx AppsEU MarketEuropean markets muted as caution reigns after Fed minutes

European markets were mixed on Thursday, struggling to build on gains amid continuing market caution over the inflationary outlook.

.FTSE FTSE 100 *FTSE 7500.01 -15.74 -0.21 33708389
.GDAXI DAX *DAX 13694.83 68.12 0.5 5165577
.FCHI CAC 40 Index CAC 6540.15 11.83 0.18 6066021

The pan-European Stoxx 600 was fractionally lower in early trade, with basic resources shedding 0.6% while autos gained 0.7%.

Overnight, Asia-Pacific markets opened lower across the board after the latest Wall Street rally cooled on Wednesday following the release of July minutes from the U.S. Federal Open Market Committee, which pointed to “little evidence inflation pressures were subsiding” at the time of the meeting.

Data releases on Thursday include final euro zone harmonized inflation prints for July, and June’s construction output figures.

Germany is ahead of schedule in the race to shore up gas supplies for winter

European governments are scrambling to fill underground storage with gas supplies to provide households with enough fuel to keep homes warm during winter.

Picture Alliance | Picture Alliance | Getty Images

Germany’s natural gas storage facilities hit a key milestone this month, two weeks ahead of schedule, as European governments scramble to prepare for the winter period.

“I will say that so far Germany has done a good job,” Zongqiang Luo, gas analyst at energy consultancy Rystad Energy, told CNBC via telephone. “But let’s see how they are going to fulfill the target for the next two months. This will be very, very critical for the coming winter.”

Europe’s race to save enough gas to get through the colder months comes as Russia squeezes supplies. The surge in energy costs is driving up household bills and pushing inflation to its highest level in decades.

— Sam Meredith

CNBC Pro: Top tech investor Paul Meeks reveals why he thinks PayPal is a buy

PayPall has lost nearly half its market cap this year — and that’s despite a strong rally over the past month.

But top tech investor Paul Meeks is still a fan of the online payments giant. He tells CNBC Pro Talks why he thinks the stock is a buying opportunity.

— Zavier Ong

Euro zone economic growth revised down

Economic growth in the euro zone for the second quarter was revised down on Wednesday from 0.7% to 0.6% quarter-on-quarter, and from 4% to 3.9% annually.

Eurostat also revealed that employment across the 19-member common currency bloc rose 0.3% quarterly, for a 2.4% year-on-year increase.

CNBC Pro: Goldman says planned energy transition is driving valuations, picks stocks that are ‘best-in-class’

The energy efficiency improvements that companies carry out will be increasingly important to investors, according to Goldman Sachs.

“Carbon is increasingly becoming a factor that impacts stock selection and equity valuation, driven by growing regulatory pressure and net zero investment strategies,” the investment bank wrote in a recent August report.

Goldman identified buy-rated companies which rank well on their reductions in energy usage, and where it says energy efficiency will play a key role in the companies’ competitive positioning in the long term.

— Weizhen Tan

UK inflation hits new 40-year high of 10.1% as food and energy price surge continues

U.K. inflation rose to another 40-year high in July as spiraling food and energy prices continued to intensify the country’s historic squeeze on households.

The consumer price index rose 10.1% annually, according to estimates published by the Office for National Statistics on Wednesday, above a Reuters consensus forecast of 9.8% and up from 9.4% in June.

Core inflation, which excludes energy, food, alcohol and tobacco, came in at 6.2% in the year to July 2022, rising from 5.8% in June and ahead of projections of 5.9%.

Rising food prices made the largest upward contribution to annual inflation rates between June and July, the ONS said in its report.

– Elliot Smith

European markets: Here are the opening calls

European stocks are expected to open cautiously higher on Wednesday with the U.K.’s FTSE index seen 18 points higher at 7,560, Germany’s DAX 33 points higher at 13,944, France’s CAC 40 up 18 points at 6,616 and Italy’s FTSE MIB up 42 points at 23,029, according to data from IG.

Data releases include preliminary euro zone unemployment data for the second quarter as well as second quarter gross domestic product. The latest U.K. inflation numbers for July will be released as well as preliminary second quarter Dutch GDP.

Earnings come from Uniper, Carlsberg, Persimmon, Balfour Beatty, BAT and National Grid.

Source : CNBC

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