European markets edged higher on Wednesday as investors awaited key U.S. inflation data and the upcoming European Central Bank policy meeting. The pan-European Stoxx 600 index traded 0.3% higher, with most sectors in positive territory. Media stocks led the gains, up 1.5%, while retail stocks fell 2.3%.
Shares of Spanish clothing giant Inditex fell 6% after the Zara owner posted revenue figures. The fashion retailer said its revenues between Nov. 1 and Dec.
9 jumped 9% from the same period last year on a constant currency basis. German online retailer Zalando tumbled as much as 10% before recovering to trade 0.8% higher. In the U.S., November’s Consumer Price Index, which tracks a basket of goods and services, was in line with expectations.
The reading showed a 0.3% rise from October and a 2.7% increase from a year ago. Excluding volatile food and energy prices, core CPI increased 0.3% on the month and 3.3% on an annual basis. The November CPI reading is expected to keep the Federal Reserve on track to cut interest rates at its December meeting next week.
U.S. stock futures were mixed following the inflation data as major Wall Street benchmarks had declined Tuesday ahead of the data.
investors anticipate U.S. inflation trends
Germany’s next government should focus on changing its priorities rather than tweaking its fiscal rules, according to Henning Gebhardt, partner and fund manager at Hollyhedge Consult.
His comments follow a report that German Chancellor Olaf Scholz is set to request a vote of confidence in parliament, a procedural step that could pave the way for new elections. Gebhardt expressed skepticism about the next German government’s ability to push for more expansionary fiscal policy post-election. He emphasized that changing the country’s debt brake, or Schuldenbremse, would be difficult without a two-thirds majority in the constitution.
The U.K. and the European Union are taking steps to protect themselves against potential trade and defense confrontations with incoming U.S. leader Donald Trump. U.K. Chancellor Rachel Reeves traveled to Brussels to convene with her EU counterparts. Eurogroup President Paschal Donohoe stated that he hoped this would be the first of “many” meetings.
Daniele Antonucci, chief investment officer at Quintet Private Bank, stated that upside risks for U.S. inflation appear to be “rather moderate” in the coming months. His comments come ahead of U.S. inflation data that is likely to influence the Federal Reserve’s decisions on interest rates at its Dec. 17-18 meeting.
Sweden’s financial regulator has fined Klarna Bank 500 million Swedish krona ($45.5 million) for violating anti-money laundering regulations. An investigation found that Klarna was in violation of several key rules during the period from April 2021 to March 2022. Adidas shares dipped after authorities raided the sportswear firm’s German headquarters.
The company’s stock traded as much as 1.5% lower on Wednesday.
