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©Reuters.
Investing.com – European stock markets fell on Tuesday on concerns that interest rates will remain high for longer than expected as the annual World Economic Forum continues in Davos.
As of 3:15 a.m. ET (8:15 p.m. Japan time), German stocks were down 0.7%, French stocks were down 0.6% and British stocks were down 0.4%.
ECB withdraws rate cut forecast
Risk appetite is weak in Europe, hurt by European authorities pushing back against market expectations that the European Central Bank will start lowering borrowing costs early this year.
“It’s too early to talk about rate cuts. Inflation is too high,” ECB policy member Joachim Nagel, a known hawk, said on Monday. “I would like to see the new data. I will wait for the next board meeting to confirm,” he said.
The euro zone’s yield rose to 2.9% in December from 2.4% in the previous month, reversing six consecutive months of decline.
Moreover, Austrian Central Bank President Robert Holzmann said investors should not “expect” the ECB to cut interest rates at all this year, given the Red Sea conflict is pushing up shipping costs through the Suez Canal. Ta.
Germany’s inflation rate rises in December
The rate rose to 3.7% in December from 3.2% a year earlier in November, data released early Tuesday showed, showing that ECB officials are having difficulty deciding when to cut interest rates.
While the UK remained unchanged at 4.2% in November from the previous month, growth fell to 6.6% from 7.2%, providing some support to the Bank of England’s aim to bring inflation back on target.
The second half of the session will focus on Europe Day.
Leaders gather in Davos
The World Economic Forum will continue on Tuesday in Davos, with speeches expected by Chinese Premier Li Qiang, European Commission President Ursula von der Leyen, US National Security Adviser Jake Sullivan, and Ukrainian President Volodymyr Zelenskiy. .
Increase your revenue with Experian posts
In the corporate sector, Experian (OTC:) shares rose 2.7% after the credit data company posted sales growth of 9% in the third quarter, supported by strong demand for new products.
Shares of Swiss chocolate maker Lindt & Spruengli (SIX:) are on track to see sales increase by more than 10% in 2023, beating market expectations due to soaring product prices and strong sales of pralines across the market. After the announcement, the stock price rose 4.2%.
Vodafone’s (NASDAQ:) share price has increased as the British telecommunications company enters a 10-year deal with Microsoft (NASDAQ:) to deliver generated AI, digital, enterprise and cloud services to more than 300 million businesses and consumers across Europe and Africa. rose 0.6% after the company agreed to a partnership. market.
All eyes will continue to be on the US banking sector this week.Goldman Sachs (NYSE:) and morgan stanley (NYSE:) Expected to report later in the session.
Middle East supply concerns remain
Oil prices fell modestly on Tuesday, but losses were expected to be limited as concerns over supply disruptions in the Middle East remained key support as major shipping companies avoided key shipping routes between Europe and Asia. became.
By 3:15 ET, futures were trading 0.4% lower at $72.47 per barrel, while the contract was down 0.1% at $78.09 per barrel.
Trading volumes were limited as U.S. markets were closed on Monday, causing U.S. Energy Information Administration officials to arrive one day late on Thursday, while industry data is expected to arrive on Wednesday. become.
Furthermore, it was almost flat at $2,051.80 per ounce, but traded 0.3% lower at $1.0914.
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