Major European stock exchanges started the trading week on a positive note, buoyed by investor anticipation for the release of key economic data, including US inflation figures. At the time of writing, the FTSE 100 index in London rose 0.1% to 7,576.62 points, the CAC 40 in Paris gained 0.4% to 7,677.71 points and the DAX in Frankfurt rose 0.3% to 16,979.44 points.
A week of anticipation
Traders are cautiously optimistic about possible interest rate cuts from the Federal Reserve and easing inflation, leading to a rally in big tech. Amazon, Nvidia and Tesla were all up in pre-market trading. The coming week will be full of economic data releases, including the US inflation rate for January, which is expected to have fallen to 2.9%, the first reading below 3% since March 2021.
The disinflationary trend
This disinflationary trend could determine the magnitude and timing of the Federal Reserve’s rate cuts. Swaps markets suggest the Fed will make four rate cuts in 2024, up from seven planned at the end of last year. European stocks are following this trend, with the pan-European STOXX 600 index up 0.3% at 0810 GMT. All sectors moved in the green, with the exception of energy stocks.
Italian stocks lead the way
Italian stocks were the best performers among their regional peers with a jump of 0.6%. The coming week will be packed with economic data, including fourth-quarter Eurozone GDP growth, consumer price inflation in Spain and other regions, and the ZEW survey to gauge sector expectations on the state of the region’s economy. Investors are also eagerly awaiting Tuesday’s release of January’s U.S. CPI for clues on the timing of a possible rate cut by the Federal Reserve.
Today’s date: 2024-02-12 13:30:28.578325. Despite a thinning trading session in Asia and the closure of major Asian markets for the Lunar New Year holiday, European stock markets mostly recorded gains. The S&P 500’s previous record close in New York on Friday failed to generate significant buying activity on Monday.
In conclusion, during this week, all eyes will be on the economic data releases and the possibility of interest rate cuts from the Federal Reserve. The disinflationary trend and the Big Tech rally are key factors driving European stock markets. Italian stocks, in particular, are leading the way among their regional peers.