By Peter Nurse
Investing.com - European stock markets traded mixed on Tuesday, with the banking sector helping the U.K.’s FTSE 100 outperform following the scrapping of dividend curb by the Bank of England.
At 3:50 AM ET (0850 GMT), the DAX in Germany traded 0.2% lower, the CAC 40 in France fell 0.2%, while the U.K.’s FTSE 100 climbed 0.3%.
Caution was the watchword, with a lot of the focus on the U.S. ahead of not only important inflation numbers but also the quarterly earnings reports from a number of major banks, including Goldman Sachs (NYSE:GS) and JPMorgan (NYSE:JPM). These numbers are often used as a gauge of the health of the economy as it reopens.
The banking sector has also been in the spotlight in Europe. Moody's (NYSE:MCO) Investor Service cut the main debt rating of Credit Suisse (SIX:CSGN) to A1 from Aa3 in the wake of its problems with Greensill Capital and the collapsed hedge fund Archegos. Credit Suisse’s stock fell 0.1%.
In the U.K., the Bank of England scrapped pandemic-era curbs on dividends from the country’s top lenders with immediate effect, saying its stress test showed the sector is well capitalized to cope with the fallout from the pandemic.
Barclays (LON:BARC), HSBC (LON:HSBA), and Lloyds Banking Group (LON:LLOY) stocks rose between 1% and 1.6%.
Elsewhere, Finnish telecom equipment maker Nokia (NYSE:NOK) stock rose 6.8% after it said it planned to raise its full-year outlook as business picked up pace in the second quarter.
Earlier Tuesday, China's exports grew much more strongly than expected in June, indicating a recovery in global demand as vaccination programs reopened economies around the world.
Exports in dollar terms rose 32.2% in June from a year earlier, compared with 27.9% growth in May, and much stronger than the forecast increase of around 23%.
Back in Europe, German consumer inflation rose 0.4% on the month in June, the annual rate falling to 2.3% from 2.5% in May. The easing of the year-on-year rate due to the rebound in energy prices last year at could be a foretaste of June U.S. CPI number, which is also expected to fall slightly from May’s 5.0% level.
Elsewhere, oil prices pushed higher Tuesday, helped by the expectation of a further drop in U.S. crude inventories as demand picks up in the world’s largest consumer.
The American Petroleum Institute is scheduled to release its crude oil supply data later in the session and inventories are expected to drop for an eighth consecutive week. They fell to the lowest since February 2020 in the week to July 2.
At 3:50 AM ET, U.S. crude futures traded 0.7% higher at $74.57 a barrel, while the Brent contract rose 0.7% to $75.66.
Additionally, gold futures rose 0.3% to $1,810.95/oz, while EUR/USD traded 0.1% lower at 1.1848.