European stocks edge higher; inflation data in focus

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European stocks edge higher; inflation data in focus - European stock markets rose Thursday, rebounding after recent losses as investors digested regional inflation data and the outlook for central bank rate cuts. 

At 03:10 ET (08:10 GMT), the DAX index in Germany traded 0.3% higher, the CAC 40 in France traded up 0.3% and the FTSE 100 in the U.K. rose 0.4%.

Central bank rate cuts eyed

European equities retreated on Wednesday, handing back some of the gains seen late last year that pushed the regional indices close to two-year highs as investors dialled back their bets for a U.S. soft landing and rapid Fed rate cuts.

However, this tone has changed as while the minutes of the Fed December meeting, released late Wednesday, didn't provide many clues as to the likely timing of the first rate cut by the Federal Reserve, but they did indicate a growing sense that inflation is under control and concern about the risks that "overly restrictive" monetary policy may pose to the economy.

Adding to this, back in Europe, French inflation came in softer than expected earlier Thursday, with consumer prices rising 0.1% on the month in December, an annual rise of just 3.7%.

There is further inflation data to digest Thursday, in the form of consumer prices from the individual German states, as well as services PMI numbers from most of the region.   

U.K. retailers offer differing outlooks

In corporate news, Next (LON: NXT ) stock rose over 5% after the U.K. retailer raised its full-year profit guidance after reporting sales during the final two months of 2023 were stronger than expected.

On the flip side, JD (NASDAQ: JD ) Sports Fashion (LON: JD ) stock slumped 15% after the sports retailer lowered guidance after the mild Autumn weather and softer Christmas trading hit sales. 

Crude rises on Middle East supply concerns

Oil prices rose Thursday, adding to the previous session’s sharp gains on continued concerns over supply from the Middle East.

By 03:10 ET, the U.S. crude futures traded 1.1% higher at $73.51 a barrel, while the Brent contract climbed 0.9% to $78.94 a barrel.

Both contracts surged around 3% on Wednesday after protests over high fuel prices caused Libya’s El Sahara oil field to halt production, with the field producing about 300,000 barrels per day.

This added to ongoing concerns over Yemen's Iran-backed Houthis targeting shipping in the Red Sea.

The market was also supported by data from the American Petroleum Institute , showing U.S. crude stocks fell by a bigger-than-expected 7.4 million barrels last week.

Official data from the Energy Information Administration is due later Thursday, delayed by a day due to Monday’s New Year's holiday.

Additionally, gold futures rose 0.6% to $2,054.70/oz, while EUR/USD traded 0.2% higher at 1.0944.


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