European markets extend gains after U.S. inflation rises again in February

U.S. markets moved higher Tuesday after fresh U.S. inflation data came in roughly in line with expectations and paved the way for further momentum in the stock market.

The Dow Jones rose 0.8% in early deals while the S&P 500 ticked up 1%. The Nasdaq Composite also added 1.2%.

— Karen Gilchrist

Gareth McCartney of UBS discusses the initial public offering market and what investors are looking for.

U.K. regular wage growth was 6.1% in the period from November 2023 to January 2024, the Office for National Statistics said Tuesday, as analysts noted the print is unlikely to derail expectations for the Bank of England to begin cutting interest rates toward the middle of the year.

The rate of year-on-year wage growth slowed back to a level last seen in the August to October 2022 period, and came in just below the expectation of economists polled by Reuters of 6.2%.

Wage growth including bonuses was 5.6%. Pay growth continues to outpace the rate of inflation, with total pay in real terms up by 1.4%.

The U.K. employment rate meanwhile dipped 0.1 percentage points on the quarter over the same period, coming in at 75%, though the number of payrolled employees rose by 15,000 in January.

“The easing in wage growth in January is probably still a bit too slow for the Bank of England’s liking. But there are encouraging signs that a more marked slowdown is just around the corner and that an interest rate cut in June is possible,” Paul Dales, chief U.K. economist at Capital Economics, said in a note.

“The further fall in the number of job vacancies from 928,000 in the three months to January to a 32-month low of 908,000 in the three months to February suggests the labour market continues to loosen more than the unemployment rate is letting on… That, alongside a fall in CPI inflation below the 2% target in April, could be enough to prompt a rate cut in the summer,” Dales added.

— Jenni Reid

Barclays has named three European stocks that investors should consider buying for the upcoming quarter.

The Wall Street bank’s strategists said they have a “high conviction” since the “risk-adjusted returns are attractive” in these companies. All three stocks are also traded in the U.S.

CNBC Pro subscribers can read more here.

— Ganesh Rao

European markets are set to open higher Tuesday.

The U.K.’s FTSE 100 index is expected to open 51 points higher at 7,718, Germany’s DAX up 105 points at 17,847, France’s CAC 51 points higher at 8,069 and Italy’s FTSE MIB up 173 points at 33,495, according to data from IG. 

Earnings come from Lego and Persimmon. European data releases include U.K. unemployment figures for January.

— Holly Ellyatt