European stocks edge higher; U.K. GDP offers hope of future growth

Investing.com - European stock markets traded higher Thursday, helped by signs of U.K. growth ahead of the release of key U.S. consumer inflation data which could provide monetary policy clues.

At 03:55 ET (07:55 GMT), the DAX index in Germany traded 0.3% higher, the FTSE 100 in the U.K. rose 0.4% and the CAC 40 in France climbed 0.2%.

U.K. economy grew in August

U.K. gross domestic product rose 0.2% on the month in August, a substantial improvement from the surprise revised drop of 0.6% the prior month, when rainy weather and strikes by teachers and other workers hit the economy.

However, the overall picture remains weak, with both industrial and manufacturing production falling substantially in August on a monthly basis.

"The UK economy is holding up but remains in a precarious state," said David Bharier, head of research at the British Chambers of Commerce.

The Bank of England kept interest rates on hold at its meeting last month for the first time since it began its tightening cycle in December 2021, and policymakers will have to weigh still elevated inflation with a slowing economy when they next meet.

U.S. CPI release looms large

Attention will turn to quickly turn to the release of the U.S. consumer price reading later in the session.

Analysts expect the headline number to rise 3.6% from last year and 0.3% for the month, while core CPI, which excludes food and fuel prices, is expected to rise 4.1% from last year and 0.3% from August.

However, September’s U.S. producer inflation figures came in much stronger than expected, creating upside risk. 

Confidence has been building as investors have started to get comfortable with the idea that the U.S. Federal Reserve is nearing the end of its interest rate increases.

The minutes from the Fed’s last meeting, released on Wednesday, indicated that most of the central bank’s policymakers agreed that one more rate hike would be "appropriate" as inflation continues to trend well above target.

However, comments in the weeks following September’s meeting suggest members are more wary about a further tightening of monetary policy following a sharp rise in Treasury yields.

U.S. Fed Governor Christopher Waller continued the theme on Wednesday, and he has been among the most vocal advocates for higher interest rates.

Publicis shines in third quarter

In corporate news, Publicis (EPA:PUBP) stock rose 3.5% after the French advertising giant increased its 2023 sales and margin forecasts as it beat expectations in the third quarter, defying a general slowdown in the ads industry.

In the U.K., Restaurant Group PLC (LON:RTN) stock soared 38% after agreeing a bid from Apollo Global Management (NYSE:APO), valuing the business at £506 million (£1 = $1.2312).

On the flip side, EasyJet (LON:EZJ) stock fell 4.2% despite the budget airline recording a record fourth quarter and announcing plans to return dividend payments next year.

Ericsson (ST:ERICb) stock fell 0.2% after the Swedish telecom gear maker overnight announced a $2.9 billion impairment related to its acquisition of Vonage last year.

Crude rises despite large U.S. stocks build

Oil prices edged higher Thursday, attempting to rebound after dropping around 2% during the previous session after indications of a hefty rise in U.S. crude stocks last week raised concerns about demand at the largest consumer in the world.

U.S. crude oil stockpiles swelled by just under 13 million barrels, according to data from the industry body American Petroleum Institute, which, if confirmed by the official numbers from the Energy Information Administration later in the session, would be the largest weekly crude stockpile build in eight months.

Gasoline inventories also rose by 3.6 million barrels, compared with the 800,000-barrel drop expected, fueling concerns that the end of the driving session in the U.S. has resulted in a sharp dropoff in demand.

By 03:55 ET, the U.S. crude futures traded 0.4% higher at $83.78 a barrel, while the Brent contract climbed 0.5% to $86.25 a barrel. 

Additionally, gold futures rose 0.2% to $1,891.70/oz, while EUR/USD traded 0.1% higher at 1.0621.