European shares subdued ahead of U.S. inflation data

This post was originally published on this site

(Reuters) -European shares were subdued on Tuesday as investors refrained from making big bets ahead of consumer inflation data from the United States, a crucial report ahead of the Federal Reserve’s interest rate decision on Wednesday.

The region-wide STOXX 600 was down 0.04% at 0905 a.m. GMT, giving up early gains.

The U.S. consumer prices report, due at 8:30 am ET (1330 GMT), is expected to show some easing in core inflation in November.

In a final flurry of central bank meetings for the year, the European Central Bank and the Bank of England will announce their interest rate decisions later this week.

“European markets are in a sense of anticipation before the U.S. CPI (consumer prices) print, which will set the tone for the Federal Reserve tomorrow,” said Giles Coghlan, chief market analyst at HYCM.

“Even if the print is on expectation, I would expect markets to stay very cautious because who wants to commit to a position ahead of the Federal Reserve when it’s really uncertain.”

Final data confirmed Germany’s consumer prices, harmonised to compare with other European countries, were 11.3% higher year-on-year in November. Prices had risen 11.6% in October.

Meanwhile, European Union member countries are meeting in Brussels to attempt to approve a price cap proposed by the European Commission last month to shield consumers from soaring energy costs.

On the pan-European STOXX 600, energy firms led gains, rising 1.2%, with the gains offset by weakness in the healthcare sector and consumer staples.

Shares of British American Tobacco (L:BATS) slipped 0.6% after the U.S. Supreme Court on Monday cleared the way for California to enforce a voter-approved ban on flavoured tobacco products.

Lufthansa rose 4.6% to the top of the STOXX 600 after raising its 2022 earnings forecast.

Temenos rose 4.4% after the Swiss banking software company said a U.S. financial institution selected it to modernize its wealth management platform.