Europe open: Stocks rangebound ahead of inflation data
By Benjamin Chiou
Date: Wednesday 03 Apr 2024
(Sharecast News) - European stock markets opened flat on Wednesday ahead of what's set to be another busy day for economic data, as investors continue to assess incoming indicators for indications on the future path of interest rates.
By 0838 BST, the Stoxx 600 was unchanged at 508.58, with small gains in Frankfurt and Milan offset by a flat start in Paris and modest losses in London.
Inflation data from the eurozone is likely to steal the show when Eurostat releases figures fro March at 1000 BST. The annual rate of consumer price inflation is set to remain unchanged at 2.6%, according to consensus estimates, while the core rate is tipped to ease to 3.0% from 3.1%.
However, there is downside risk to these estimates, given the bigger-than-expected drops in inflation reported from individual member states so far - including Germany and France.
"Due to base effects associated with the withdrawal of various government support measures as well the relatively earlier timing of Easter this year that could exaggerate price pressures, uncertainties surrounding this release are high," said analysts at Daiwa Capital Markets. "We forecast core inflation to drop slightly, by 0.2ppt to 2.9%Y/Y, which would be the lowest since February 2022."
Markets will also be keeping an eye on developments in the US, where recent strong economic data has pushed back expectations of the first rate cut by the Federal Reserve. Wednesday will see the release of the closely watched ADP employment report, before Friday's non-farm payrolls data.
In equity news, London-listed engineer Renishaw slumped after Germany's Siemens confirmed it was not planning to make an offer for the company.
Zurich-based reinsurer Swiss Re was in the red as markets gave a muted reaction to news that the head of its Corporate Solutions unit will succeed long-standing chief executive Christian Mumenthaler.
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