European markets open to close after Wall Street continues losses

The ZEW German economic sentiment index fell to -14.7 in July, from -8.5 in June, below the consensus forecast in a Reuters poll of -10.5.

Across the wider euro area, economic expectations fell from -10 in June to -12.2 in July.

– Elliott Smith

In the three months to May, wages excluding bonuses in England rose by 7.3% on the same period last year, the Office for National Statistics said on Tuesday.

The country’s tight labor market showed signs of easing as the unemployment rate unexpectedly rose from 3.8% to 4% in the three months to April, while vacancies continued to fall. The employment rate rose to 7.6% on the back of an increase in part-time employment.

The economic inactivity rate fell to 20.8% from the previous quarter, continuing a recent downward trend.

Stuart Cole, chief macroeconomist at Equity Capital, said the Bank of England would be satisfied with the fall in paid staff and the rise in jobless claimants, suggesting the labor market has finally started to lose jobs.

However, he said the strength of the earnings figures would be “unsatisfying” for policymakers, suggesting that monetary policy should tighten further to control core inflation.

“Despite an apparent cooling in the overall labor market, these figures show that workers are still getting big pay raises, which may reflect efforts by companies to stem the exodus of skilled workers, but the headline numbers suggest a softening of the market. That may not be visible on the ground,” Kohli said.

The Bank of England has repeatedly warned that high wage growth is a significant obstacle to its efforts to reduce inflation, and that today’s figures do nothing to convince the labor market that it is no longer running hot. Also need to tighten.

Jack Kennedy, UK economist at the Employment Forum, suggested that the single-month wage growth figure for May would fall to 7.1% from 7.7%, suggesting that “April’s wage growth may have peaked after a 9.7% rise in national wages that month”. Living Wage.”

However, he acknowledged that the Bank of England’s monetary policy committee would need to see evidence to curb wage growth “sooner than later” to prevent “further, possibly substantial” rises in interest rates.

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European stocks opened on positive territory on Tuesday, tracking gains across the globe after Wall Street snapped a three-day losing streak.

The pan-European Stoxx 600 added 0.5% in early trade, with construction and materials stocks up 1.4% and gaining as most sectors and major bourses entered positive territory.

– Elliott Smith

According to IG data, Britain’s FTSE 100 is expected to rise 3 points to 7,277, Germany’s DAX down 35 points to 15,738 and France’s CAC 40 up 28 points to 7,172.

Stocks have risen sharply so far this year. But the impressive returns have some investors nervous about the market’s ability to hold onto the remaining gains through 2023.

CNBC Pro surveyed 15 market strategists at investment banks and asset managers between July 3-7. Respondents also shared their views on how investors should be positioned and the most significant market risks.

While some expect stocks to continue their rally, others are more skeptical and investors have suggested the S&P 500 could fall 10% by the end of the year.

CNBC Pro subscribers can read more here.

– Ganesh Rao

Nomura economists said major economies in the region could begin to “disconnect” from the central bank-led global tightening cycle due to different macroeconomic conditions in Asia.

“Our view of Asian central banks cutting policy rates ahead of the central bank this cycle is based on fundamental differences between the Asian and US economies,” Nomura economists wrote in a note on Friday.

According to a real-time survey conducted by Nomura’s research group, more than 32% of respondents expect South Korea’s central bank to cut interest rates first after China, followed by Indonesia, the Philippines, and then India.

– Jihye Lee

China will extend two fiscal policies supporting its real estate market until the end of 2024.

In an announcement, The People’s Bank of China cited the 16-step guidance issued last November to improve policy support for the housing sector. The country will now extend the relevant policies until the end of the year.

Xinhua reported The move aims to “guide financial institutions to continue deferring loan payments to real estate firms while providing financial assistance to real estate firms to ensure delivery of housing projects.”

– Lim Hui Jee