European and US markets cautious as traders look to key inflation data

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Global markets are looking ahead to the Consumer Price Inflation print on Wednesday in the US, which will give clues as to the Federal Reserve's thinking on rate path. The FTSE was up on Tuesday. · Richard B. Levine, Sipa US

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The FTSE 100 and European markets were mixed on Tuesday in London following wage growth data which will temper confidence of a summer interest rate cut by the Bank of England. Global markets are now looking ahead to a key US inflation print on Wednesday.

  • By the closing bell, the FTSE 100 (^FTSE) had risen 0.2%, while Germany's DAX (^GDAXI) fell 0.1% and the CAC in Paris (^FCHI) was up 0.2%.

  • The pan-European STOXX 600 (^STOXX) rose about 0.2% in the session.

  • Across the pond, stocks were tepid, with the three major indexes — the Dow, S&P 500 and Nasdaq (^DJI, ^GSPC, ^IXIC) — hovering just above a flat line at the open, with the Nasdaq breaking out to trade 0.4% higher by the close in London.

  • Despite concerns about UK wage growth, jobs data released by the Office for National Statistics showed a rising unemployment rate. The jobless rate rose to 4.3% between January and March — the highest since May to July last year. The number of new vacancies also slowed.

  • Global markets are now looking ahead to the Consumer Price Inflation print on Wednesday in the US, which will give clues as to the Federal Reserve's thinking on rate path.

  • "The economic data certainly has the ability to move the markets well away from their mean, while many speculators believe that we are in a goldilocks scenario where bad news is good news for the equity markets and good news is good news," said Naeem Azlam, chief investment officer at Zaye Capital Markets. "This is because the US equity markets are back near a level where one can see them flirting with their all-time highs."

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  • Jerome Powell's speech

    Some lines coming through. Here's the summary:

  • What US stocks are doing at the open

  • Vodafone shares pop on latest report

    Vodafone has reported a 2.2% rise in organic earnings for 2024, meeting market forecasts, after it returned to top-line growth in the final quarter helped by gains in the UK and Germany.

    The UK-listed company revealed an 11.3% decline in underlying profits last year to €11bn (£9.5bn) and a 2.5% fall in revenue to €36.7bn (£31.5bn).

    It said revenues were hit by the disposals of Vantage Towers, Vodafone Hungary and Vodafone Ghana in the prior financial year and adverse exchange rate movements.

    Germany returned to growth with service revenue increasing by 0.2% for the full year and 0.6% for the fourth quarter, the company said, but adjusted core earnings dropped by 5.8% due to higher energy and other inflationary costs.

    "Much more still needs to be done in the year ahead," said chief executive Margherita Della Valle.

    Free cash flow fell from €2.6bn to €1.8bn. Net debt, excluding the sold segments of Spain and Italy, was broadly flat at €33.2bn.

    Mark Crouch, analyst at eToro, said: "Vodafone investors may have been bracing themselves for another tumultuous earnings report this morning and while this might not have them jumping for joy, there are signs the business has turned a corner."

  • Pound bounces on rate cut comments

    Pill's comments seem to have spurred some price movement in the pound, which flirted with the $1.25 mark against the dollar earlier today. It is still trading around 0.1% lower.

  • Huw Pill: Summer rate cut on the table

    The Bank of England's (BoE) chief economist said on Tuesday there is still "work to do" in terms of taming inflation, but a summer cut is on the table.

    The dovish signal came in his speech at an event run by Institute of Chartered Accountants in England and Wales, where the official said it is "not unreasonable" to expect that the MPC will look at cutting rates over the summer.

    Pill is known by some economists as one of the more cautious BoE officials and his comments are regarded as a signal from the side of the bank that is more likely to try to hold rates higher for longer.

  • Here's what US stocks are doing in premarket

  • Greggs' growth

    Greggs reported sales growth of 7.4% as the bakery chain remains on track to open between 140 and 160 new stores in 2024.

    The firm reported a 7.4% rise in like-for-like sales for the first 19 weeks of 2024, with total sales in the period hitting £693m.

    Greggs added that its new range of iced drinks was “performing well”, with plans to roll it out further from the current 300 shops to up to 700 in the coming months.

    Since the start of the year Greggs has opened 64 stores, and closed 37 — including relocations — giving a total of 2,500 shops trading nationwide.

  • Jobs data commentary

    ONS director of economic statistics Liz McKeown comments on today's wage data:

  • Anglo American reveals plan to break things up

    Mining giant Anglo American (AAL.L), one of the heavyweights of the FTSE 100 (^FTSE), said it will break up the business, after it rejected a $34bn advance from rival BHP.

    The move, which will see major parts of its business sold off, will streamline the company to focus on copper, iron ore and crop nutrients. The De Beers diamond operation, its steelmaking and coal operations and Anglo American Platinum are up for sale.

    The move marks a strategy shift towards clean energy, the company said in a statement to the London Stock Exchange.

    "We expect that a radically simpler business will deliver sustainable incremental value creation through a step change in operational performance and cost reduction," CEO Duncan Wanblad said.

  • Here's what the chancellor said about jobs figures

    Jeremy Hunt said:

  • Uncertainty around rate cuts continues as pay growth strong

    Our reporter Pedro Goncalves has the latest on the fresh ONS jobs data out this morning:

    Wages in the UK have grown faster than expected, official figures show, complicating the prospects of an interest rate cut by the Bank of England (BoE) in June.

    Annual pay growth excluding bonuses averaged 6% between January and March, unchanged from last month, according to figures from the Office for National Statistics (ONS).

    Including bonuses, pay growth came in at 5.7%, also unchanged from last month.

    Economists had been expecting declines in both readings. The BoE is monitoring for any signs that Britain's still strong wage growth could revive high inflation.

    Real pay increased to 2.4% after taking inflation into account, which was the highest since the three months to August 2021.

    READ MORE: Strong UK pay growth puts interest rate cut path at risk

  • Tuesday trade in Asia

    It was a fairly undramatic day for Chinese stocks with Hong Kong's Hang Seng (^HSI) finishing the session almost flat and the SSE Composite (000001.SS) 0.1% lower, with an important set of US CPI data on the horizon on Wednesday.

    The Nikkei (^N225) rose 0.5% in Japan.

    Despite the smaller moves, Asian stocks are still hovering near 15-month highs.

  • Overnight in the US

    Monday trade in the US saw the Dow Jones Industrial Average (^DJI) break its win streak after carrying gains for eight straight sessions. The S&P 500 (^GSPC) closed just a hair below its flatline, but still above 5,200, while the Nasdaq Composite (^IXIC) ended the day 0.29% higher.

    Meanwhile meme stocks seem to be back, after a post on X (formerly Twitter) by user Roaring Kitty sparked a rally. Stocks like GameStop (GME) and AMC Entertainment (AMC) zoomed higher and were still up in premarket on Tuesday.

  • Good morning!

    Hello from London! The warm snap seems to be well and truly over here, and the FTSE 100 looks set to open slightly lower following a mixed set of UK jobs figures (more on those later).

    Today I'll be following:

    • Consumer Price Index (Germany)

    • Producer Price Index (US)

    • Speech by the Bank of England's Huw Pill

    • Speech by Federal Reserve chair Jerome Powell

Watch: Dow ends hot streak, meme stocks pop on major rally: Market Domination Overtime

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