China’s central bank cut its short-term lending rate on Tuesday in a bid to help the faltering post-Covid recovery of the world’s second-largest economy, which is a key export market for many of Europe’s biggest companies.
The bank cut the reverse repo rate for seven days, the first time in 10 months, indicating a trend to boost economic stimulus amid still weak economic data.
The news gave European stocks a boost as investors await a long list of economic data, including Spanish consumer prices and Germany’s ZEW economic sentiment, before the start of the two-day meeting. of the Federal Reserve.
Investors are hoping U.S. inflation data, to be released later today, will show prices falling in May, bolstering bets that the U.S. central bank won’t raise interest rates. interest when she makes her decision on Wednesday.
On the other hand, the unemployment rate in the UK rose by 3.8% in April, which is an unexpected drop from 3.9% the previous month, but average wages increased by 7.2 %, compared to the revised March data of 6.8%, which indicates that the Bank of England will remain under pressure to raise interest rates.
Germany’s monthly consumer prices fell 0.1% in May, with the annualized figure rising 6.1%, a slowdown from April’s data of 7.2%.
Slowing inflation in Germany would be good news for ECB officials, even though they have already made broad commitments to raise interest rates again on Thursday.
Market movements
Europe’s Stoxx 600 index rose 0.17% to 461.54 points, as of 0940 GMT, with the index for the interest-rate-sensitive tech sector rising 1.5%.
The DAX index in Germany rose 0.20%, the CAC40 index in France rose 0.20%, while the FTSE100 index in the UK rose 0.16%.
Burning jumped 5.2%, outpacing shares in the Stoxx 600 index, after the Swedish video game group announced a restructuring program aimed at cutting costs and investments, including spending on developing new products.
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