European stocks were lifted by drugmakers, which offset losses in China-sensitive chipmakers and luxury retailers following data that showed inflation fell in the world’s second-largest economy last month.in June to be essentially unchanged from a year before, while producer prices slid deeper into negative territory.
“China is just a symptom. We see weaker growth around the world because of the effect of higher interest rates. China is exposed to that because of their export sensitivity,” said Matthias Scheiber, global head of multi-asset portfolio management at Allspring Global Investments. “We expect companies will be able to meet the low bar set by consensus,” they added. “Negative EPS revisions for 2023 and 2024 appear to have bottomed and revision sentiment has improved.”US consumer prices are expected Wednesday to show headline inflation slowed to its lowest level since early 2021 at 3.1%, down from 9.1% a year earlier.
Currently futures imply around a 90% probability of a rise to 5.25%-5.5% this month, and a 24% chance of a move in September.