European stock markets closed higher on Friday as investors digested economic data from the region, including preliminary UK second-quarter GDP data, July inflation data from France, Spain and Italy, and June industrial production data from the euro zone.
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LONDON – European stocks edged higher on Tuesday as market participants focused on a batch of new economic data after last week’s volatility.
Pan-European Stoke 600 The index was up 0.2% at around 2:50 pm London time, erasing early losses. Utilities rose 0.8% to lead gains, while mining stocks fell 0.7%.
European stock markets had ended mixed on Monday, with upcoming U.S. and U.K. inflation data attracting investors’ attention.
Salary figures published by the Office for National Statistics on Tuesday show Between April and June, wages excluding bonuses rose 5.4% annually, the lowest level in two years.
The Office for National Statistics said the unemployment rate fell to 4.2% from 4.4%, while economists polled by Reuters had expected the unemployment rate to increase by 4.5%.
Jack Kennedy, senior economist at employment website Indeed, said data showed the labor market was still “quite tight” and wage pressures were only gradually easing, which could limit the level of monetary easing the Bank of England can implement this year.
British inflation data released on Wednesday will be the first since the Bank of England released the data lower interest rates 25 basis points. After two months of 2% growth, economists polled by Reuters expected headline rates to rise to 2.3%.
Money markets are now pricing in a further 50 basis points rate cut this year as very likely. The Bank of England’s key interest rate is currently 5%.
GBP The dollar rose 0.4% to $1.2817 after the labor market data was released.
Global investors will also analyze the latest U.S. inflation data this week to gain a better understanding of the health of the world’s largest economy.
Data released on Tuesday showed that the U.S. producer price indexA measure of wholesale prices rose less than expected in July. This month’s 0.1% increase may be seen as opening the door for the Federal Reserve to start cutting interest rates further.
US stocks The news sent shares higher as investors prepared to focus on Wednesday’s release of the broader Consumer Price Index.
