June30 , 2022

European Stocks Higher; German CPI Data Soars By Investing.com


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© Reuters

By Peter Nurse 

Investing.com – European stock markets are expected to open higher Tuesday, rebounding to a degree after the previous session’s sharp losses, but concerns remain that aggressive monetary tightening will stunt economic growth in the region.

At 2 AM ET (0600 GMT), the contract in Germany traded 1% higher, in France climbed 0.9% and the contract in the U.K. rose 0.1%.

European equities closed sharply lower Monday, following the global trend after last week’s hot report nixed hopes that price rises were peaking. This was seen increasing the chances that the , which announces its latest rate decision on Wednesday, will continue its aggressive monetary tightening for longer than already priced in.  

The confirmed late last week that it intends to start its rate hiking cycle in July, and suggested that another increase in September will depend on the inflation data over the summer.

rose 0.9% on the month in May, data showed Tuesday, after a gain of 0.8% the previous month. However, the climbed to 7.9%, from 7.4% in April, suggesting that the ECB has its work cut out controlling inflation in the Eurozone’s largest economy.

The also meets on Thursday, and is expected to continue its cycle of rate hikes despite Monday’s data showing a contraction in the country’s in April. 

Data released Tuesday showed another fall in the of 19,700 in May, but April’s (including bonuses) soared 6.8%, illustrating the dilemma the central bank is under.  

Other data due for release Tuesday includes data for April and for June.

Elsewhere, the U.K. and the European Union are heading for another Brexit battle after the U.K. government published a plan on Monday, providing ministers with the power to unilaterally rewrite the bulk of the Northern Ireland protocol.

Oil prices stabilized Tuesday as traders continued to digest new COVID cases in China and the prospect of further U.S. monetary tightening weighing on global growth.

Attention later in the session is likely to focus on the release of the weekly U.S. inventory data from the industry body , ahead of Wednesday’s official numbers from the , for clues on how tight crude and fuel supply remain in the world’s largest consumer.

By 2:05 AM ET, futures traded 0.6% higher at $121.62 a barrel, while the contract rose 0.6% to $123.02. 

Additionally, fell 0.1% to $1,829.80/oz, while traded 0.2% higher at 1.0432.

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