Europe close: Moderate gains as investors wait on Fed minutes, Powell

21st Aug 2024 17:34

(Sharecast News) - European stocks were a tad higher on Wednesday as investors eyed the release of minutes from the US Federal Reserve later in the evening for commentary on inflation and interest rate prospects.

"Wednesday evening's publication of the July FOMC minutes or Fed Chair Jerome Powell's speech at the Jackson Hole symposium later this week may reinforce the equity market ascent or poor cold water over it," Axel Rudolph, senior technical analyst at IG mused.

"US mortgage rates falling to a 15-month low have been pretty much ignored by investors."

The pan-regional Stoxx 600 index was up 0.33% to 513.95 with all major regional bourses in the green.

Euro/dollar was again higher alongside and was to be seen at 1.1146, but Brent gave back 0.84% to end the session at $76.36 a barrel on the ICE.

To an extent, stock markets were also treading water ahead of Fed chair Jerome Powell's speech at the central bank symposium at Jackson Hole on Friday.

So-called benchmark payrolls growth revisions in the US for the year to March 2024 revealed 818,000 fewer hires.

The data led economists at Oxford Economics to conclude that: "For the central bank, prudent risk management is to begin cutting interest rates or risk pockets of weakness in the labor market becoming something worse.

"The preliminary employment revisions don't alter our forecast for a 25bp rate cut in September, but we will focus on the pace of interest rate normalization beyond next month, which could be a little brisker than we anticipate."

Shares in Voestalpine paced gainers on the Stoxx 600 throughout much of the session after Morgan Stanley upgraded the Austrian speciality steelmaker to "overweight" from "equal-weight" citing its resilient business model through the down-cycle.

The broker said despite the challenging market environment in the European and global steel industry, the company's core earnings per tonne outperformed peers and this was expected to continue.

Transport operator Mobico surged 18% as the company said it had started the sale of its North American school business and would implement more debt cutting in the second half of the year.