📖 Your Q2 Earnings Guide: Discover the Stocks ProPicks AI Highlights to Jump Post-EarningsRead more

European stocks rise ahead of Fed decision; UK GDP flat in April

Published 2024-06-12, 03:22 a/m
© Reuters.

Investing.com - European stock markets rose Wednesday, as investors digested regional growth and inflation data ahead of the conclusion of the latest Federal Reserve policy meeting.

At 03:15 ET (07:15 GMT), the DAX index in Germany traded 0.4% higher, the CAC 40 in France rose 0.4% and the FTSE 100 in the U.K. climbed 0.6%.

UK growth stalled in April 

German consumer prices, harmonised to compare with other European Union countries, rose 2.8% on the year in May, an increase from 2.4% in April.

"The inflation rate is slightly up again, mainly due to the continued increase in service prices," said Ruth Brand, president of the statistics office.

Prices of services were 3.9% higher in May than in the same month a year earlier, following an increase of 3.4% in April.

The European Central Bank cut interest rates last week, deeming inflation had retreated sufficiently for monetary policy to be eased to boost a struggling economy.

Evidence of the wider region’s weak growth came from the U.K., as gross domestic product was flat in April after a 0.4% month-on-month rise in March.

The figures follow labour market data on Tuesday that showed falling employment and rising unemployment.

Fed meeting in focus

However, the day’s main focus will be the conclusion of the latest Federal Reserve meeting later in the session, where the central bank is expected to keep rates unchanged. 

Fed policymakers are, however, likely to dial back on their projections for three rate cuts this year when they announce their rate decision as inflation has proved to be sticky so far this year.

Futures point to about 36 basis points worth of easing priced in for this year, with the odds of a September cut seen as roughly 50:50.

The widely-watched U.S. consumer price index inflation release is also due later.

Crude boosted by demand optimism 

Crude prices rose Wednesday, boosted by a series of upbeat views of global demand. 

By 03:15 ET, the U.S. crude futures (WTI) traded 0.7% higher at $78.46 per barrel, while the Brent contract climbed 0.5% to $82.34 per barrel.

Data from the American Petroleum Institute, released on Tuesday, showed that U.S. oil inventories shrank more than expected last week, ramping up hopes that U.S. fuel consumption was picking up with the onset of the travel-heavy summer season. 

Adding to the optimism was the news that the U.S. Energy Information Administration has raised its 2024 world oil demand growth forecast to 1.10 million barrels per day from a previous estimate of 900,000 bpd.

The Organization of the Petroleum Exporting Countries maintained its 2024 forecast for relatively strong growth in global oil demand in its monthly report, citing expectations for travel and tourism in the second half.

A monthly report from the International Energy Agency is also due later this week, while the EIA also releases the official weekly U.S. inventories report.

 

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.