20/08/24 Briefing

The FTSE 100 and European indexes were mixed on Tuesday, following a buoyant session in the US. Fresh inflation data from the Eurozone and planned central bank speeches later in the week are key events guiding sentiment.

• The FTSE 100 (^FTSE) was 1% lower, dragged down in part by falling BT Group (BT-A.L) stock. BT shares fell about 6.6% by the afternoon. Shares of oil majors were also lower amid continued tensions in the Middle East.

• Germany's DAX (^GDAXI) fell 0.3% and the CAC (^FCHI) in Paris was down 0.1%.

• The pan-European STXE 600 (^STOXX) also fell 0.4% as fresh data on consumer price rises for the eurozone showed inflation at 2.6% in July, up from 2.5% in June. Economists had expected to see inflation at 2.4%.

• Core inflation, which strips out volatile measures like energy costs, sat at 2.9% in July — well above the target rate of 2%.

• In the US, the S&P 500 (^GSPC) headed lower, coming off an eight-strong run of daily wins for the benchmark index — its longest since November. The Dow Jones Industrial Average (^DJI) also traded down 0.2%, while the tech-heavy Nasdaq Composite (^IXIC) dropped about 0.4%.

• Traders are looking ahead to news of movement for US interest rates. Federal Reserve chair Jerome Powell will speak on Friday at Jackson Hole.

• "The speech's content will provide many answers for traders and investors looking for a much deeper rate cut for the US economy, as some believe that the Fed is now behind the curve given the latest inflation print and overall economic data in the country," said Naeem Aslam, chief investment officer at Zaye Capital Markets.

• "Money markets are pricing in more than 75% chances of a rate cut of 25 basis points in September, while speculators have their eyes on the Fed's 50 basis point rate cut," Aslam added.