Stocks in motion: Temenos up 5%, Tecan down 4%
Temenos shares gained more than 5% in early trade to top the Stoxx 600 after the Swiss software company announced CEO Max Chuard would step down.
At the bottom of the European blue chip ranking, its fellow laboratory equipment manufacturer Tecan Group fell 4% after Kepler Cheuvreux downgraded the stock from “buy” to “hold” and lowered its price target.
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Inflation outlook eases again, traders fully price in quarter-point rate hike
The decline in consumer inflation expectations coincides with expectations that the Federal Reserve will reduce the level of interest rate hikes in a few weeks and end them quite soon.
The University of Michigan Consumer Sentiment Survey showed the one-year inflation outlook on Friday down to 4%, the third straight monthly decline and the lowest level since April 2021.
At the same time, traders assigned a 94.2% probability of an interest rate hike of 0.25 percentage points on Feb. 1 at the end of the Fed’s next two-day meeting. That marks another smaller move than the 0.5 percentage point rise in December, which was itself a deceleration from four consecutive 0.75 percentage point increases.
“Inflation expectations are well anchored and improving as price pressures ease across many sectors. The Fed is likely to hike 0.25% at the next meeting later this month,” said LPL Financial chief economist Jeffrey Roach. “We shouldn’t be surprised if the Fed starts talking about a pause in the near future.”
European markets: here are the opening calls
European markets head for a higher open on Monday as investors assess the outlook for global inflation after positive signs from US data last week.
The United Kingdom FTSE100 the index is expected to open 10 points higher at 7,856, Germany DAX 84 points more to 15,174, France CAC up 43 points to 7,063 and Italy MIB FTSE up 142 points to 25,895, according to IG data.
Data releases include Germany’s ZEW economic sentiment survey for January and Italy’s preliminary inflation figures for January. The World Economic Forum opens Monday in Davos, Switzerland.