© Reuters.
By Peter Nurse
Investing.com – European stock markets traded largely unchanged Wednesday, as investors digested fresh inflation data out of the U.K. as well as dovish signals from the Bank of Japan.
At 03:50 ET (08:50 GMT), the in Germany traded flat, the in France rose 0.1%, while the in the U.K. edged higher.
rose at an annual rate of 10.5% in December, a drop from 10.7% the prior month, while the climbed 0.4%, unchanged from November.
Although this level remains highly elevated, the reduction in the annual figure plays into the wider narrative that inflation has peaked in the West, and central banks can look at reducing the pace of their interest rate hikes.
That said, underlying inflationary pressures remained strong. The , which excludes fuel and food prices, accelerated on the month, rising 0.5% after a 0.3% gain in November. That meant that stayed put at 6.3%, or more than three times the Bank of England’s 2% target.
European equities received a largely positive handover from Asia Wednesday, after the maintained its current range of yield curve control, confounding market expectations for more widening in the bank’s target range.
The central bank maintained interest rates at record-low levels, and said it will keep policy accommodative for the time being.
The final release of December is due later in the session, and is expected to be confirmed showing annual growth of 9.2%, a drop from 10.1% the prior month.
Markets were also awaiting more cues on the U.S. economy from a string of Federal Reserve speakers, while U.S. are seen falling 0.8% in December, providing more impetus for the Fed to slow its pace of rate hikes.
In corporate news, Burberry (LON:) stock rose 1% after Chief Financial Officer Julie Brown said the luxury brand is seeing “very promising” signs in China so far this month after the lifting of strict COVID-19 curbs in the country, even as like-for-like sales growth slowed sharply to 1% in the quarter to end-December.
Renault (EPA:) stock rose 1.4% after the auto manufacturer said its order book in Europe was at a record level of 3.5 months of sales, even as it reported group sales in 2022 fell by 5.9%, marking a fourth consecutive annual decline.
Oil prices rose Wednesday, extending the previous session’s gains on increased optimism that the removal of the COVID restrictions from the Chinese economy will result in a sharp recovery in the demand for fuel in the largest consumer of crude this year.
The left its global oil demand forecast unchanged at a rise of 2.22 million barrels per day in a monthly report, released on Tuesday, but said Chinese oil demand would grow 510,000 barrels per day this year after contracting for the first time in years in 2022.
The is scheduled to release its monthly report later in the day, while the is set to report its weekly forecast of U.S. crude stockpiles, a day later than usual after Monday’s U.S. holiday.
By 03:50 ET, traded 0.8% higher at $81.06 a barrel, while the contract rose 0.5% to $86.36. Both contracts surged over 2% on Tuesday in a late-session rally.
Additionally, rose 0.2% to $1,913.55/oz, while traded 0.5% higher at 1.0840.
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