Major European indices are trading with some positive energy ahead of the U.S. open, aided by sliding energy prices and ongoing enthusiasm about AI-related stocks.
STOXX Europe 600: +0.7%,
Germany’s DAX: +1.0%,
U.K.’s FTSE 100: +0.4%,
France’s CAC 40: +0.8%,
Italy’s FTSE MIB: +1.2%,
Spain’s IBEX 35: +0.8%.
They have clearly brushed off worries about inflation as a trading catalyst, as this morning’s data showed CPI running at 3.2% yr/yr and core CPI at 2.5%. Those readings are reportedly solidifying expectations of a rate hike by the ECB.
Higher energy costs were the main driver of CPI inflation.
There are reports that the European Commission is discussing plans to allow countries more fiscal flexibility as they deal with attempts to mitigate the impact of higher energy costs.
Notably, sovereign bond yields are lower in the wake of the inflation report.