European stocks experienced a rise on Thursday morning, with global markets eagerly anticipating the upcoming U.S. inflation reading. The Stoxx 600 index saw a 0.5% increase at 9:40 a.m. in London, although sector gains remained relatively modest. Leading the charge were household goods stocks, which rose by 0.45%.
The significance of Thursday’s U.S. inflation report cannot be overstated, as it may solidify expectations that the U.S. Federal Reserve will opt to cut interest rates in the coming months. This anticipation is fuelled by recent economic data suggesting a slowdown in both inflation and economic growth. For instance, last week’s report revealed that unemployment in June had slightly increased to 4.1%.
The consumer price index (CPI) report for June is set to be released at 8:30 a.m. ET, and its findings are expected to play a crucial role in shaping the Fed’s monetary policy decisions.
Across the Atlantic, flash figures indicated that the U.K. economy grew by 0.4% in May. This marks a recovery from April’s stagnant growth and surpasses the forecasted 0.2%. In response, the British pound rose by 0.1%, reaching its highest level against the U.S. dollar in four months. The pound also saw slight gains against the euro.
Adding to the positive outlook for the U.K., Goldman Sachs recently upgraded its growth forecast following the Labour Party’s decisive victory in the country’s general election.
Meanwhile, Japan’s Nikkei 225 index crossed the 42,000 mark for the first time, driven by a broader rise in Asia-Pacific markets. This surge was spurred by U.S. Big Tech companies rallying overnight on optimism regarding potential Fed rate cuts.
In the U.S., stock futures showed little movement on Wednesday night, with both the S&P 500 and Nasdaq Composite closing at new all-time highs. This stability reflects the market’s cautious optimism as investors await further economic indicators.
JPMorgan European Discovery Trust plc (LON:JEDT) is an investment trust company. The Investment Trust JEDT objective is to achieve capital growth from a portfolio of quoted smaller companies in Europe, excluding the United Kingdom.
