European stocks edge higher; U.K. jobs data helps ahead of U.S. CPI

By Peter Nurse

Investing.com - European stock markets traded marginally higher Tuesday, helped by solid U.K. labor market data, but gains are limited amid caution ahead of the release of keenly awaited U.S. inflation data.

At 03:35 ET (08:35 GMT), the DAX index in Germany traded 0.3% higher, the CAC 40 in France climbed 0.3%, and the FTSE 100 in the U.K. rose 0.4%.

Helping the tone Tuesday has been the release of data which showed the U.K.'s labor market remained relatively resilient despite the country's economic woes.

The unemployment rate held at 3.7% in the three months to December, while the claimant count fell almost 13,000 in January, instead of rising by nearly 18,000 as expected.

That said, the pace of growth in basic pay in Britain sped up again in the last three months of 2022, adding to the Bank of England's worries about inflationary pressures in the economy.

Inflation will also be the main focus across the pond later Tuesday, as investors will closely study the January U.S. consumer price index for clues over how many more interest rate hikes the Federal Reserve will authorize this year.

Back in Europe, the revised Eurozone GDP release is expected to confirm quarterly growth of 0.1% in the final quarter of 2022, resulting in annual growth of 1.9%.

The European Central Bank has raised interest rates by 3 percentage points since July and is expected to continue with at least another percentage point of increases before rates peak as inflation remains elevated.

In the corporate sector, Coca-Cola HBC (LON:CCH) stock rose over 3% after the bottling company, which is listed in London, reported a better-than-expected operating profit for 2022, helped by price hikes and cost-saving measures.

Oil prices slipped Tuesday after the U.S. government surprised the market late Monday by saying it would release more crude from its strategic reserve.

The U.S. Department of Energy announced it would sell 26 million barrels of oil from its Strategic Petroleum Reserve, defying expectations that such a move would be delayed (or canceled) after the DoE released a record 180 million barrels from the reserve in 2022 to combat rising fuel prices.

By 03:35 ET, U.S. crude futures fell 1% to $79.31 a barrel, while the Brent contract fell 0.7% to $86.02.

Additionally, gold futures traded 0.3% higher at $1,870.35/oz, while EUR/USD traded 0.1% higher at 1.0750.