Key Points
- European stock markets mostly gained on Tuesday. The DAX increased 0.34%, the FTSE 100 rose 0.09%, and the CAC 40 slipped slightly by 0.094%.
- Investors are awaiting key Eurozone inflation data, hoping it will support further interest rate cuts by the ECB.
- German inflation eased to 1.8% in September, slightly below expectations, signaling reduced inflationary pressures.
- ECB President confirmed that the central bank would carefully consider inflation trends in its policy on October 17.
European stock markets saw a positive start to the new quarter on Tuesday as investors eagerly awaited key inflation data from the Eurozone. Germany’s DAX index rose by 66.47 or 0.34% to 19,391.40, while the FTSE 100 in the U.K. increased 21.88 or 0.27% to 8,258.83. Meanwhile, France’s CAC 40 slipped slightly by 7.19 or 0.094% to 7,628.56, reflecting a mixed but optimistic mood across the continent.
The performance of the European markets has largely been influenced by growing anticipation surrounding the release of inflation data for the Eurozone. Investors are keeping a close eye on these figures, hoping that softer inflation rates could prompt further interest rate cuts from the European Central Bank (ECB) later this year.
On Monday, Germany released its latest inflation data, which revealed a slight easing of consumer prices. The annual inflation rate for September came in at 1.8%, just below the expected 1.9%. This follows a year-on-year increase of 2.0% in August, indicating that inflationary pressures in Europe’s largest economy may be cooling. Similarly, inflation has shown signs of easing in other key Eurozone economies such as France, Italy, and Spain.
The overall forecast for Eurozone inflation is also expected to reflect a decelerating trend, with predictions pointing to a 1.8% annual growth rate for September. Although this remains under the ECB’s medium-term inflation target of 2.0%, it underscores a broader reduction in inflationary pressures across the region.
On Monday, ECB President Christine Lagarde confirmed that the central bank would carefully consider inflation trends in its next policy meeting, scheduled for October 17. If inflation continues to ease, it may give the ECB more room to reduce interest rates, further supporting growth across the region’s economies.
The general mood in European markets appears cautiously optimistic, with hopes that reduced inflation could lead to more accommodative monetary policies by the ECB. However, with inflation still running slightly below target, much will depend on how the upcoming data shapes the central bank’s decision-making process in the coming weeks.
