European stocks marched higher Wednesday, with Swiss banking heavyweight Credit Suisse AG rising in the wake of its financial results, as investors took on risk before the release of a widely anticipated report on U.S. inflation.
How markets are moving
The euro EURUSD, -0.0486% bought $1.2349, down slightly from $1.2354 late Tuesday in New York.
What’s driving the market
Wednesday’s rally for European equities came before the release of the U.S. inflation report for January. The recent spike in volatility and violent selloffs in global markets have emanated in part from worries that higher inflation will lead the Federal Reserve to hike up interest rates at a faster-than-expected pace.
The inflation data, alongside U.S. retail sales, are due at 1:30 p.m. London time, or 8:30 a.m. Eastern Time.
Ahead of that, Germany’s gross domestic product by 0.6% in the fourth quarter and by 2.9% a year earlier. The growth was aided by demand for German exports, although the figures indicated slight easing from 0.7% in the fourth quarter.
What strategists are saying
“Bourses across Europe have started the day in positive territory, taking the lead from a positive close in the U.S.,” said Fiona Cincotta, market analyst at City Index, in a note.
“Given the market’s concerns of higher inflation and faster interest rate hikes, a higher than expected CPI or retail sales reading would in fact feed these fears. In this case there is a chance that we could see another episode of last week: stock markets and bond markets falling, whilst higher yields would boost the dollar.”
Credit Suisse Group AG CSGN, +2.97% CS, +0.34% gained 3.8% after the bank posted a narrower-than-expected loss of 2.13 billion Swiss francsin the fourth quarter. The lender did post its third straight full-year net loss.
Sky PLC shares SKY, +3.20% leapt 3.4% after the broadcaster extended its rights to show Premier League soccer matches through 2022, at a cost of 1.19 billion pounds ($1.65 billion) a year.