Investing.com - European stock markets traded largely higher Tuesday, following gains on Wall Street and Asia overnight, but FTSE 100 underperformed after disappointing U.K. unemployment data.
End of Fed tightening draws near
Sentiment in Europe has been given a boost by the positive close on Wall Street, with the blue chip Dow Jones Industrial Average gaining over 200 points or 0.6%, on indications that the Federal Reserve was close to concluding its rate hike cycle for the year.
Asia stocks traded largely higher in early trade Tuesday, and Europe has done the same, after several Fed officials on Monday said interest rates will have to rise further to contain inflation, but the end of the tightening cycle is in sight.
Concerns that aggressive tightening by the U.S. central bank to curb inflation will result in the largest economy in the world, and major growth driver, falling into recession have weighed on global markets this year.
Wednesday’s release of U.S. consumer prices could offer more clues of the Fed’s likely future action, but the focus Tuesday in Europe will be the release of the final German inflation numbers for June.
While inflation is clearly falling in a number of European countries, to below the European Central Bank’s 2% target in the case of Spain , it remains an issue in Germany, the largest economy in the eurozone.
German CPI rose 0.3% on the month in June, climbing 6.4% on the year, an increase from 6.1% the previous month.
U.K. wage growth soars to record level
Elsewhere, the U.K. unemployment rate unexpectedly rose to 4.0% in May, from 3.8% in April, showing some signs of the labor market loosening. However, this will be of little comfort to the Bank of England officials as average earnings rose 7.3% before bonuses, hitting their joint highest growth rate on record.
Renault announces Chinese joint venture
In corporate news, Renault (EPA: RENA ) stock rose 0.3% after the French auto giant said worldwide sales of its flagship brand rose 11% in the first half of the year, extending a rebound after four years of declines.
Renault also announced it has signed a joint venture with China's Geely Automobile (HK: 0175 ) to launch a company that will manufacture and supply hybrid powertrain engines.
Oil rises on a weaker dollar
Oil prices rose Tuesday, helped by the U.S. dollar falling to a two-month low, with this weakness making crude cheaper for foreign buyers, amid growing expectations that the Fed was close to ending its rate hike cycle.
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