European stock markets were relatively quiet on Tuesday as investors held back, waiting for key economic data from the US. There are growing expectations that the US Federal Reserve will soon cut interest rates.
The main European stock index, the STOXX 600, rose slightly by 0.1%. Major regional markets were mixed: Germany’s DAX fell 0.1%, while France’s index gained 0.1%. Markets are specifically looking forward to the US reports on producer inflation and retail sales, which will provide fresh information on the health of the US economy.
These reports are among the first to be released after the longest-ever US government shutdown caused a lack of data for both investors and the Fed.
Within Europe, banks provided the biggest lift to the index, rising 0.4%, and stocks tied to natural resources, such as oil companies and miners, also gained 0.7% and 0.6%, respectively. Separately, the home improvement retailer Kingfisher was a top performer, jumping 4.3% after raising its profit forecast for the full year.
Finally, investors are also watching for developments in the Russia-Ukraine conflict, after the US and Ukraine discussed a revised plan for peace on Monday, leading to hopes that an end to the war might be near.
On the FX front, the US dollar remained stable on Tuesday. This stability is notable because investors are trying to figure out if the Federal Reserve will cut interest rates next month, especially after some officials made comments that suggest they support a cut. Meanwhile, people are keeping a close eye on the Japanese yen, watching for possible government action to influence its value.
The US dollar index, which tracks the dollar against other major currencies, was steady at 100.13, keeping the nearly 1% gain it made last week. So far, the rising possibility of an interest rate cut hasn’t significantly hurt the dollar’s value. The euro was trading at 1.1530 after a small overnight gain, and the British pound was slightly up (0.2%) at 1.3115.
Among other currencies, the New Zealand dollar dropped to $0.5595; it has fallen more than 2% this month because a rate cut from the Reserve Bank of New Zealand is expected on Wednesday. The Australian dollar was slightly down (0.15%) at $0.6453.
In the cryptocurrency market, bitcoin continued to struggle, falling 1.4% to $87,519.91. Its value has dropped almost 20% this month alone.
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