. European Stocks Largely Lower; Concerns Mount Over Eurozone CPI Release

European Stocks Largely Lower; Concerns Mount Over Eurozone CPI Release

31 May 2022

FTSE 100 is trading up 0.13% at 7591.50

European stock markets traded in a cautious manner Tuesday, ahead of the release of key Eurozone inflation data which could heighten concerns about the pace and scale of looming interest rate hikes.

By 3:45 AM ET (0745 GMT), the DAX in Germany traded 0.7% lower, the CAC 40 in France fell 0.9%, while the U.K.’s FTSE 100 outperformed, climbing 0.2%.

French inflation rose more than expected in May, with data released earlier Tuesday showing consumer prices rose 0.7% in May for a new record 12-month inflation rate of 5.8%, up from 5.4% in April.

Economic numbers released on Monday showed German inflation hit another all-time high while numbers from Spain also topped estimates.

This puts the focus on the latest Eurozone inflation flash estimate, at 5 AM ET (0900 GMT), with economists expecting the consumer price index to hit another record high of 7.7% in May, up from 7.4% in April.

This data arrives just over a week before a crucial European Central Bank meeting where officials are set to announce the conclusion of large-scale asset purchases and confirm plans to raise interest rates in July for the first time in more than a decade.

ECB President Christine Lagarde indicated last week that the central bank’s deposit rate should start rising in July, and a hefty rise in Eurozone CPI could strengthen the case for an outsized interest rate hike.

On technical fronts FTSE 100 RSI stood at 67.00 and currently it is trading above all MA. So, BUY position can be taken with following target and stoploss:

TRADE SIGNAL – : FTSE 100 – BUY: 7618.20, TARGET: 7628.20, STOP LOSS: 7613.10