European Stocks Erase Drop Triggered by Higher US Inflation Data
European stocks have recovered from a drop caused by hotter-than-anticipated inflation reading in the US.
The Stoxx Europe 600 Index was little changed at 3:46 p.m. in London after falling as much as 0.4% as the US core consumer price index for January reached 0.4%, exceeding estimates. Traders pushed out their expectations of the next Fed rate cut further to December, having previously priced in a September cut.
“The data doesn’t go well with the narrative on disinflation,” said Jeanne Asseraf-Bitton, head of research and strategy at BFT IM in Paris.
Investors have also been processing positive company earnings, with Heineken NV rising as much as 15%, the most ever, after the brewer reported full-year results that came in ahead of estimates and announced a €1.5 billion share buyback.
European stocks were off to a good start to the year but investors are still looking for further catalysts beyond good earnings as trade tensions with the US continue to weigh. On Tuesday Federal Reserve Chair Jerome Powell signaled patience during his testimony at the Capitol Tuesday, saying the central bank is in no rush to cut rates.
Source : Bloomberg
