Stocks mixed as European inflation holds and US inflation inches up

How major markets are performing on Thursday

President of European Central Bank Christine Lagarde speaks during a press conference in Frankfurt, Germany, Thursday, July 27, 2023, after a meeting of the ECB's governing council. (AP Photo/Michael Probst)
President of European Central Bank Christine Lagarde: European markets were looking to the bloc's inflation reading for a steer on whether or not the central bank would look to raise rates further. Photo: Michael Probst/AP

Markets across the US and Europe were mixed on Thursday as EU and US published fresh inflation data.

The FTSE 100 (^FTSE) fell 0.2% by the close, while the Dax (^GDAXI) in Germany rose 0.8% and the Cac (^FCHI) in Paris lost ground by about 0.3%. European markets were looking to the bloc's inflation reading for a steer on whether or not the central bank would look to raise rates further. The reading came in at 5.3%, slightly higher than anticipated but matching July's reading.

Higher inflation could give the central bank more ammunition to raise rates.

In the US, the Federal Reserve's preferred inflation measure edged higher in July, reversing some of the prior month's sharp drop as the central bank works to bring inflation back to its 2% target.

The Personal Consumption Expenditures (PCE) Index excluding the cost of food and energy, or so-called "core" PCE, rose 4.2% over the prior year in July, in line with economist expectations and up from 4.1% in June, data released by the Commerce Department on Thursday showed.

Meanwhile in the UK, Lloyds Bank's data showed the highest level of consumer confidence since Russia's invasion of Ukraine last year in the UK.

Economic optimism has rebounded due to the fact the Bank of England only raising rates by 25bps, rather than the expected 50, the bank said.

The August survey was conducted between August 1 and August 15, with most responses taken after the BoE’s decision.

The survey also revealed that half of companies expect to increase headcount this year, with pay expectations remaining strong. Pay increases have been linked to overall inflation.

Read more: UK mortgage approvals fall to lowest in five months as interest rate hikes take toll

Over in the US, stocks were positive in early trade, with the S&P 500 (^GSPC) up 0.2%, the Dow (^DJI) rising 0.5% and the Nasdaq (^IXIC) almost flat.

Watch: Positive signs for UK economy as consumer confidence on the up again

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