European markets mixed; Fed rates eyed; German data disappoints

European markets mixed; Fed rates eyed; German data disappoints

Markets in Europe hovered around the flatline on Tuesday morning as investors digested new economic data and grew optimistic of an interest rate hike in the U.S. later this month.

The pan-European Stoxx 600 was 0.01 percent lower with utilities’ stocks falling the furthest on rating revisions. Meanwhile, autos led the gains, higher by 0.7 percent, on comments from carmakers that the PSA’s purchase of Opel is not going to change the landscape for the industry.

Just Eat was the best performing stock on Tuesday morning, up by 6 percent, after reporting a 0.5 percent increase in revenue and a doubling in pre-tax profits. Software AG was also among the best performers, up by nearly 4 percent, after announcing a buyback of own shares of up to 100 million euros by May 15. Intertek shares also rose 4 percent on a mild earnings beat.

By contrast shares of temporary-power provider Aggreko were down by 12 percent after posting a 3 percent decline in full-year underlying revenue.

Market expectations for a rate hike announcement in the U.S. next week stood at 86.4 percent on Tuesday morning, the CME Group’s FedWatch tool showed. Meanwhile, investors continue to closely follow political events across Europe, where uncertainty has dominated.

An Ifop Fiducial poll showed the centrist candidate to the French election, Emmanuel Macron, closing the gap on far-right leader Marine Le Pen in the first round of the vote. However, polling numbers continue to suggest that Le Pen will lose the second runoff to Macron.

In the U.K., the House of Lords is to vote on further amendments to the government’s Brexit bill.

German orders disappoint

In terms of data, the U.K. house prices showed that the annual British house price growth cooled to its weakest level since 2013, mortgage lender Halifax said. German industrial orders dropped by 7.4 percent in January, the biggest fall since 2009.

The OECD estimated in its latest economic outlook a global growth rate of 3.5 percent but warned political uncertainty and protectionism could undermine growth.

Later in the day, there will be the release of the latest Red Book in the U.S.

The Reserve Bank of Australia decided to keep its rates unchanged on Tuesday morning.



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