LONDON – European markets were modestly lower on Tuesday as global markets turn their focus to key US inflationary pressures due on Wednesday.
The pan-European Stoxx 600 slipped 0.3% through the morning session, with travel and leisure stocks slipping 1.2% to post losses while insurance stocks rose 0.5%.
Investors are trying to gauge the potential pace of the US Federal Reserve’s monetary tightening effort. A surprisingly strong US jobs report last week seemed to reduce the likelihood of a recession, giving the central bank the opportunity for more aggressive rate hikes as it tries to rein in inflation.
Wednesday’s July CPI should provide some clarity on the path for rate hikes.
Asia-Pacific equities were mixed on Tuesday as markets continued to digest last week’s stellar payroll report and assess the course of monetary policy, with Japan’s Nikkei 225 the weakest performer in the region.
U.S. stock futures edged higher in early premarket trade Tuesday as Wall Street reacted to some significant earnings news, particularly weaker-than-expected earnings from Nvidia and several chipmakers.
Earnings also remain a key driver of individual stock price moves in Europe, including Abrdn, IHG, L&G, Continental and Munich Re, which report before the bell on Tuesday.
Swiss travel retailer Dufry rose 3.3% in early trade to lead the Stoxx 600, while workplace company IWG plunged 11% to the lower end of the index after their respective first-half gains.
On the data front, UK retail sales rose 1.6% in July, buoyed by a heatwave and sales of hot-weather clothing, picnic items and electric fans, according to a report by the British Retail Consortium.
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