European stocks tread water after French and German data release, as eyes turn to key U.S. inflation measure

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Stock markets in Europe opened slightly lower but were holding firm after French and German data indicated muted rises in inflation last month, as all eyes turned to the release of the key U.S. Consumer Price Index later in the day.

The pan-European Stoxx 600 SXXP, -0.10% fell 0.1% while in London the FTSE 100 UKX, +0.16% rose 0.3%. Paris’ CAC 40 PX1, -0.28% dipped 0.1% with Frankfurt’s DAX DAX, -0.11% declining 0.1%. U.S. stock market futures were pointing down, set to slip from fresh highs reached on Monday, with Dow industrials futures YM00, -0.03% indicating an open 30 points lower. The index climbed more than 125 points Monday to close at 34,996.

Analyst Michael Hewson of CMC Markets expected European stocks to be “broadly unchanged,” as the focus for Tuesday centered on inflation data. 

Both France and Germany released data showing the rise in consumer prices. France’s Consumer Price Index, or CPI, rose 0.1% between May and June, below expectations of 0.2% and down from 0.2% in the last period, while German CPI rose 2.3% year-over-year in line with expectations and the same as the prior period. 

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Upbeat trading in Asia came after the Dow DJIA, +0.36%, S&P 500 SPX, +0.35%, and Nasdaq COMP, +0.21% all reached record highs on Monday, ahead of the U.S.’ own inflation data release and before corporate earnings season gets under way in earnest.

“This positive vibe could seep into European shares before earnings kick off later in the day with JPMorgan JPM, +1.43% and Goldman Sachs GS, +2.35% reporting their numbers,” said Lukman Otunuga, an analyst at FXTM. “Investors will also be dished a serving of U.S. inflation data this afternoon which could offer clues over the Federal Reserve’s timeline for easing its bond purchases.”

British bank stocks got a boost after the Bank of England scrapped its COVID-19 pandemic-era restrictions on bank dividends and share buybacks, saying its stress test showed the sector was resilient enough to handle any more economic shocks from COVID-19. Shares in HSBC HSBA, +0.79%, Barclays BARC, +0.63%, Lloyds LLOY, +1.96%, and NatWest NWG, +1.11% jumped in London, buoying the FTSE 100.

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Nokia NOKIA, +7.97% stock climbed more than 6% in Helsinki, after the Finnish telecommunications group said it expects to revise upwards its prior guidance for 2021 when it reports quarterly earnings at the end of the month. The company had previously guided for sales between €20.6 billion ($24.4 billion) and €21.8 billion, with an operating margin of between 7% and 10%.

Shares in meal-kit delivery group HelloFresh HFG, +0.40% fell 0.4%, after the German group agreed to acquire Australia’s Youfooz in an expansion into ready meals. The deal, for 0.93 Australian dollars per share, values Youfoodz YFZ, +77.45% at A$125.3 million ($93.7 million), and represents a 79% premium to the Youfoodz stock price on Monday.

The German-listed shares of Qiagen QIA, -2.60% — also traded in New York — fell near 4% after the group lowered its outlook. The genetic testing company and a key supplier of coronavirus tests said that the faster-than-expected uptake of COVID-19 vaccines has weighed on test demand.

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