Jan 8, 2024: European stock markets navigated a mixed landscape on Monday, reflecting restrained risk sentiment as the week gears up for significant inflation data releases from the U.S., Japan, and China.
As of 03:05 ET (08:05 GMT), Germany’s DAX index saw a modest 0.1% uptick, while France’s CAC 40 traded down 0.1%, and the U.K.’s FTSE 100 experienced a 0.3% decline.
The Focus: Inflation Last week, European equities faced a retreat as investor expectations regarding early interest rate cuts this year shifted, particularly concerning moves by the U.S. Federal Reserve, the European Central Bank, and the Bank of England.
This shift in sentiment was fueled by unexpected positives: a surprising surge in U.S. nonfarm payrolls and a notable uptick in eurozone inflation, reaching 2.9% in December from 2.4% in November. This robust figure supported the case for the European Central Bank to maintain its record-high interest rates for an extended period.
Anticipation mounts this week as Japan and China prepare to release their respective inflation data. However, the pinnacle event is Thursday’s U.S. Consumer Price Index (CPI) announcement, with projections suggesting a marginal 0.2% month-on-month price increase, equating to an annual rise of 3.2%.
This CPI reading is poised to significantly influence expectations concerning the Federal Reserve’s trajectory regarding interest rate adjustments.
Additionally, in Europe, German industrial orders for November fell below expectations, recording a meager 0.3% month-on-month climb, a figure notably lower than the anticipated 1%. This minor uptick marked a modest recovery from the previous month’s revised 3.8% decline.
