European stock markets largely retreated Tuesday, as investors digested more corporate earnings ahead of the release of the latest U.S. inflation reports.
At 03:15 ET (07:15 GMT), the DAX index in Germany traded 0.1% lower and the CAC 40 in France slipped 0.1% lower, while the FTSE 100 in the U.K. gained 0.1%.
U.S. inflation to limit activity
European markets are consolidating Tuesday near record levels, with the U.K.’s FTSE 100 and Europe’s STOXX 600 index hitting all-time highs only on Friday.
The main European indices are set to trade in tight ranges on Tuesday as traders remained wary of any major bets before inflation readings on Tuesday and Wednesday.
The April U.S. producer price index is due later in the session, to be followed on Wednesday by the consumer price index, and investors will be looking for any indication that price pressures are finally easing after months of strong inflation gave rise to fears that the Federal Reserve may not cut interest rates this year.
Back in Europe, the latest German consumer prices release showed that inflation appears to be under control in the eurozone’s largest economy, with the April annual figure confirmed at just 2.2%.
There was less impressive news out of the U.K., as average earnings, without bonuses, remained at 6.0% in March, suggesting that wage-driven inflation could still be an issue for the Bank of England as it weighs up the potential to start cutting interest rates.
U.K. unemployment also rose to 4.3% in the three months to March, slightly up from the 4.2% recorded in the previous period to February.
Banco de Sabadell soars on takeover offer
Turning to the corporate sector, Bayer (OTC: BAYRY) stock rose over 2% after the German pharmaceutical and biotechnology giant reported a 1.3% decline in adjusted earnings in the first quarter, beating analysts’ forecasts.
Vodafone (NASDAQ: VOD) stock edged higher despite its operating profit falling by 75% in the 12 months to the end of March as the telco giant adjusted its presence in Europe, selling its Spanish and Italian divisions while planning a merger with Three in the UK.
Additionally. BHP Group (NYSE: BHP) stock fell 0.5% after Anglo American (JO: AGLJ) again rejected its takeover offer, saying the improved all-share offer, up 10% from BHP’s initial proposal, continued to significantly undervalue the company.
BHP is seen likely to sweeten its $43 billion approach for Anglo-American for a second time.
Crude edges lower
Crude prices edged lower Tuesday, handing back some of the gains from the prior session as wildfires in Canada run the risk of disrupting the country’s oil supply.
By 03:15 ET, the U.S. crude futures traded 0.1% lower at $79.07 per barrel, while the Brent contract dropped 0.1% to $83.28 per barrel.
Both contracts rose more than 1% each on Monday.
Major wildfires have spread across Western Canada, presenting the potential for disruptions in Canadian oil and gas supplies, especially as they neared a key oil hub in Fort McMurray, Alberta.
The city is the closest settlement to Canada’s biggest oil-sands operations and had in 2016 suffered severe damage from wildfires, knocking around 1 million barrels per day out of commission at the time.
Additionally, gold futures rose 0.8% to $2,343.35/oz, while EUR/USD traded marginally lower to 1.0787.
