European Markets Mixed Amidst Global Economic Uncertainty
European stock markets are showing a mixed performance as of Wednesday’s trading session. This comes amidst ongoing global tensions and a cautious outlook from investors assessing various economic indicators.
Market Snapshot
European stocks are displaying mixed signals approximately 25 minutes into the trading day. The pan-European Stoxx 600 index is slightly down overall, with various sectors experiencing different trends. Major European exchanges are also diverging.
Germany’s DAX index is marginally below the flatline, and the FTSE 100 and French CAC 40 are up about 0.1%.
Airbus Shares Rise
Ahead of a business update, Airbus has announced an increase in the upper end of its dividend payout ratio, and confirmed its full-year guidance. The company’s shares are trading higher at 1.4%.
UK Inflation Data and Gilts
U.K. government bonds, also known as gilts, have slightly increased after the latest inflation data came in line with expectations. The yield on the benchmark 10-year gilt was down roughly 2 basis points by 7:07 a.m. London time. Yields on 2- and 20-year gilts have dropped about 1 basis point, while the 5- and 30-year gilt yields remained unchanged.
“The reading was in line with analyst expectations.”
UK Inflation Cools
The UK’s inflation rate decreased slightly to 3.4% in May. Data from Britain’s Office for National Statistics showed the reading, matching analyst forecasts. The prior month, inflation had unexpectedly increased to 3.5%.
Opening Remarks
Good morning and welcome to a review of European financial markets, covering the most recent regional and global business news. Futures data from IG shows large drops across European markets at the open.
Global investors are still evaluating the Israel-Iran tensions following continued attacks on Monday. Oil prices have risen due to supply worries, and the price of gold has risen as well as investors seek safe haven assets. U.S. stock futures decreased after U.S. President Donald Trump indicated further attacks could be imminent, as he urged Iranians to evacuate Tehran.
Wednesday’s Economic Calendar
The U.S. Federal Reserve’s monetary policy decision is expected on Wednesday afternoon. CME’s FedWatch tool shows there’s almost a 100% chance the central bank will hold rates steady, despite Donald Trump‘s calls for a rate cut. Investors will closely watch Jerome Powell‘s post-meeting comments and the central bank’s forecast on rate policy.
In Europe, U.K. investors will be closely watching the May inflation data, as experts predict the consumer price index rose 3.4% in the year to May. The Swedish Riksbank is also set to publish its interest rate decision on Wednesday.
According to the U.S. Energy Information Administration, crude oil inventories have seen a recent uptick, which has impacted market sentiments (EIA Data).
Final outlook paragraph …
