German economic confidence deteriorated more than expected this month
European stocks finished higher on Tuesday as investors managed to shrug off worries about the pandemic to focus on upbeat corporate earnings. The Pan European Stoxx 600 gained 0.35% by the closing bell, with the U.K.’s FTSE 100 climbing 0.4% as Flutter Entertainment shares jumped nearly 8% after the company reported stronger than expected quarterly results.
On the data front, total U.K. retail sales grew 6.4% on a yearly basis in July. Meanwhile, German economic confidence deteriorated more than expected in August. The ZEW Indicator of economic sentiment fell to 40.4 from 63.3 in July. Today, the market focus will shift to U.S. inflation data. The report could give further indications of when the Federal Reserve may start raising rates.
The dollar extended the rally across the board on Tuesday. Wall Street stocks also gained on the news that the US Senate approved Joe Biden’s $1.2-trillion infrastructure plan. Now the president needs to win final passage in the lower chamber of Congress. As for the data, unit labor costs in the US rose by 1% in the second quarter after contracting by 2.8% in January-March. The nonfarm productivity was up 2.3% in the same period versus 3.5% expected.
Elsewhere, oil prices rebounded on Tuesday to regain the $70 figure as the tone in commodity markets improved along with the overall risk sentiment in the global financial markets. As a result, Brent crude turned positive on the weekly charts. The rally in the oil market came as traders cheered Senate passage of an infrastructure package, sending it to the House of Representatives. Now, the futures need to preserve gains in order to extend the bounce and get back above the 20-DMA that now arrives around $72.30.
