European stocks hit new highs as markets brace for US inflation data

European stocks hit new highs as markets brace for US inflation data

Sign up to myFT Daily Digest to be the first to know about Equities news.

European stocks touched new all-time highs and US government debt fell back as investors positioned themselves ahead of Wednesday’s release of inflation data from the world’s biggest economy.

The regional Stoxx 600 index rose 0.2 per cent, hitting another peak as European markets were boosted by strong earnings from the likes of Dutch lender ABN Amro. The bank’s stock rose 3.2 per cent.

The UK’s FTSE 100 also gained 0.4 per cent, led by energy and industrial stocks, as oil prices rebounded after sliding more than 9 per cent last week.

All eyes will be on the US as officials release monthly inflation data. Coming on the back of stronger than expected job creation numbers at the end of last week, a solid uptick in inflation will heighten concerns that the economic recovery is running hot and pile additional pressure on the US Federal Reserve to outline plans for tapering its $120bn in asset purchases per month.

Economists polled by Bloomberg forecast consumer prices to have ticked up 0.5 per cent in July compared with the previous month. On a year-on-year basis, the inflation rate is expected to have eased