European stock markets dipped on Tuesday as investors processed disappointing Chinese trade data while preparing for the latest U.S. inflation report and the Bank of England’s upcoming policy-setting meeting. Here’s what you need to know:
European Equities Performance
The DAX index in Germany slipped 0.1%, the FTSE 100 in the UK lost 0.1%, and the CAC 40 in France dropped 0.4%. Despite the soft market, European equities have been boosted by positive earnings, particularly in the banking sector.
UBS and Credit Suisse
UBS (SIX:UBSG) stock rose 0.5% after announcing earlier Tuesday that Credit Suisse CEO Ulrich Koerner would join the executive board of the combined bank after the government-sponsored takeover of its Swiss rival. This was welcome news amid continuing turmoil in the banking sector.
Direct Line and Daimler Truck
On the other hand, Direct Line (LON:DLGD) shares fell by over 6% after the UK-based insurer reported a surge in motoring claims that is expected to “put pressure” on earnings next year. Meanwhile, Daimler Truck (ETR:DTGGe) shares dropped 3.5% despite the German auto giant’s confirmation of a 78% jump in operating profit.
Chinese Trade Data
Investors were alarmed by the sharp contraction of China’s imports in April, which fell by an annual 7.9%. Exports grew by 8.5%, showing an uneven recovery from the second-largest economy in the world at a slower pace, despite the lifting of COVID curbs.
Key Reports and Meetings
Investors are awaiting the Wednesday release of the U.S. inflation report and the Bank of England’s policy-setting meeting on Thursday. In the UK, inflation is at 10.1%, the highest among the major markets in Europe. This is expected to push policymakers to approve another hike of 25 basis points.
Oil and Gold Futures
Oil prices fell back after the previous session’s strong gains, with U.S. crude futures down 1.1% at $72.38 a barrel, while the Brent contract fell 1.1% to $76.10. Meanwhile, gold futures traded 0.1% lower at $2,030.35/oz, and the EUR/USD pair traded 0.3% lower at 1.0976.
Conclusion
In summary, the European stock markets were subdued on Tuesday, with investors keeping a watchful eye on several factors, including the latest U.S. inflation report, the Bank of England’s meeting, and the recent disappointing Chinese trade data.
